31 March 2005 | Cara Whitehouse
The Salvation Army will tomorrow merge its purchasing function with its property and facilities departments as it aims to cut 10 per cent from their joint £50 million budget.
The move will be the latest in the charity's efficiency drive, which has already seen costs cut by £1 million.
Mark Johnston-Wood, director of the newly merged service said the impetus to spend more efficiently came as a result of increased competition for donations in the voluntary sector.
He told SM: "There are more charities these days, so money is thinner on the ground. Every penny we are given must be spent wisely. Wastage means we cannot help so many people."
He added that the Salvation Army is also talking to other bodies, including other charities and not-for-profit organisations, about consortia purchasing opportunities and partnering possibilities in areas such as construction.
Philip Hoare, former co-ordinator at the Inter Agency Procurement Group, a forum for charities and other non-governmental organisations, stressed the importance of charity purchasers maximising the money they are given.
"Charities spend a huge amount on procurement. It is vital they get the best deals for their donors and good quality equipment," he said.
Property management is the Salvation Army's largest cost area after personnel. Johnston-Wood, formerly property director, said it is expensive in comparison with other organisations.
"If we compare our costs of maintaining certain properties over the past few years with those of the National Housing Federation, we have paid two or three times as much," he said.
"This is because of our practices and because we have not benchmarked ourselves."
The charity's procurement of services must also be made more commercial, he said.
The merger aims to eradicate disjointed and inefficient purchasing and has the potential to achieve quick wins through national contracts.
But he added: "Procurement people in the team now will now be more strategic and do more than just buying."
The £1 million already cut has resulted in 16 job losses - two of which were buyers and the remainder property managers.
The Salvation Army operates in 110 countries and turns over more than £135 million annually through donations and sales of goods in the UK.