How to save £3 billion

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The UK government has set out plans to save £3 billion on procurement. And that is on top of the £1bn which it reckons it saved last year.

The plan is a response to a study by Sir Philip Green last year which found that different government departments were paying between £350 and £2,000 for the same laptop from the same supplier.

The passage of time has not made these figures any less shocking. And outsiders must be left wondering how such incompetence is possible. Are all governments this bad, or is the UK a special case?

Even government minister Francis Maude said: “It is bonkers for different parts of government to be paying vastly different prices for exactly the same goods.”

The response is to create a central team, named Government Procurement, which will contract for widely used goods and services for the whole of the government. The theory is that it will get a better price than individual departments.

Central procurement of common items is expected to save more than £3 billion a year by 2015 – 25 per cent of annual spending on these items.

Other elements include measures to help SMEs compete, and greater use of “open” procurement procedures to ensure that all suitable suppliers have their tender proposals considered.

This all sounds very good. I just hope that next year we don’t find that the new central procurement team is paying £2,000 for all its laptops rather than £350.


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