Tenders Direct Blog

Comment from the experts at Tenders Direct.

National Audit Office confirms savings by improved public procurement

Posted by sandra hatfield on July 31, 2013

The National Audit Office (NAO) has backed up the government’s figures regarding £1.020 million in procurement savings through better public procurement by the UK government’s Efficiency and Reform Group, but it has not assessed the accuracy of the total savings claimed. The reason why is due to uncertainties about the underlying data in departments, however the NAO have said that if improvements in the ERG processes and methodologies continue, then they may be able to provide formal assurance in the future.

Amyas Morse, head of the National Audit Office said: “The Efficiency and Reform Group has worked to improve the calculation and assurance of saving categories and its own approach is now much stronger. While ERG has undoubtedly achieved significant savings for the taxpayer, in future it could spell out more clearly the different types of savings that are included in its claims”. On reading the report it is clear why the NAO made this statement, as the 2012 – 2013 savings were initially presented as an aggregate figure and not clearly explained, which must have made it difficult for stakeholders to identify what was actual reduced spending, what was planned reducing spending, what were one-off receipt and costs transferred to others.

The report makes for interesting reading, as it covers a wide number of areas including procurement centralisation, commercial relationships and major projects. With regards to procurement centralisation this is the domain of Government Procurement Services who manage over 100 frameworks with more than 2000 suppliers registered, with the primary objective being to bulk buy services, thereby producing economies of scale. The centralisation of procurement by ERG is wide reaching and covers areas such as reducing demand for civil service travel and improving prices and services for local government, schools, NHS, emergency services and charities. With reported savings such as these, the drive for continued improvement in public procurement must show no signs of abating, which would be welcomed, but only if conducted in a pragmatic and business focussed way.

As an aside to the report, the Minister for Cabinet Office mandated earlier this year that all “government buyers are required to adopt the 5 stage lean sourcing processes which have been designed to help deliver procurements more effectively and efficiently. Training to provide them with the new approaches, key principles and application has been developed.”. Will we ever know what, if any, the quantifiable savings from this initiative will be – we will watch and wait on this?

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