Wednesday, 27 February 2013

UK government procurement review

The National Audit Office has issued a new review of UK Government Procurement - see here.  (Thanks to Peter Smith and Spend Matters for pointing it out).

I've not read it is detail but a couple of quick points - the number of government procurement posts is down 17% (from 3900 to 3200).  That suggests a wages bill cutting approach to cost savings, though the number of CIPS qualified staff is up (which indicates a more professional approach).

The report states that there is £45bn of central government procurement each year, only £3bn of which goes through central contracts (about 7%).  From those they have saved £426m, or about 1% of total spend but a remarkable 14% of spend through those contracts.  Obviously not all central spend can go through central contracts, but the opportunity for savings is clearly significant.  Assuming those ratios could be maintained if we got say 20% of procurement under central contracts we could save £1bn.  Which is worth having.

Spend with SME is estimated at 10% in 2011/2, with a target of 25% by 2015.  I might be accused of negativity, but that is not going to happen.  The benefits arising from SMEs is real but diffuse and difficult to measure.  If it is difficult to get government departments to sign up to something that would save £1bn, then how much harder is it to get them to sign up to a programme of using SMEs?

The tension between centralisation and encouring SMEs is set to continue.

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