CIPS News


Government set to save billions from new procurement processes

CIPS 6 June 2011

CIPS CEO comments on recent statement from Francis Maud on government savings

Francis Maude from the UK Cabinet Office recently made an announcement about new government plans for purchasing common goods and services that spells good news for small and medium enterprises (SMEs) and aims to further reduce the public deficit from the £1billion saved in 2010.

Plans published at the beginning of June show the Government's commitment to doing a quarter of its business with SMEs. A central government procurement team will contract for a single, more competitive price rather than opting for individual contracts for departments. Data has highlighted surprise differences in price such as between £85 and £240 for the same printer cartridge, from the same supplier.

Maude said: "It is bonkers for different parts of Government to be paying different prices for the same goods. We are putting a stop to this madness, which has been presided over for too long. Until recently, there wasn't even any proper central data on procurement spending."

The new centralised approach is expected to achieve savings in excess of £3billion.

Strong words from Francis Maud, shows that the Government means business, and savings of £1billion so far is impressive.
It takes a high level of trust and collaboration to achieve such savings, and the additional target of a further £2billion will not be easy.

But it’s possible with a centralised, collaborative approach where all departments are on board. The figures released by the Government on poor value contracts, makes for shocking reading and it’s high time this was tackled.

CIPS CEO David Noble comments: "Strong words from Francis Maude, shows that the Government means business, and savings of £1billion so far is impressive.

It takes a high level of trust and collaboration to achieve such savings, and the additional target of a further £2billion will not be easy.

But it’s possible with a centralised, collaborative approach where all departments are on board. The figures released by the Government on poor value contracts, makes for shocking reading and it’s high time this was tackled.

The SME initiative must also be welcome news for small enterprises. This approach will also benefit government buyers as they will have a wider pool of expertise to draw on, rather than just dealing with large corporates. These corporates may have economies of scale on their side, but supplier diversity is a solid approach and will also boost the UK economy."

The Government's announcement follows Sir Philip Green's Efficiency Review findings in October 2010, that the Government could use its scale and buying power to reduce costs.  

 

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