Francis Maude's Efficiency and Reform Group means business
IN JULY last year, the coalition government made it clear that to save frontline public services it would look to save billions through a more professional approach to procurement.
Well, things have certainly been hotting up nicely since then. Firstly, in August, Cabinet Office minister Francis Maude (pictured) appointed John Collington, the Home Office’s Group commercial director, to head up procurement in the newly-formed Efficiency and Reform Group.
Then, in October, Sir Philip Green, Top Shop owner, criticised government departments for poor procurement management and wasting taxpayers money. Next, we saw the Cabinet Office arrange a summit with 31 of the government’s leading suppliers with the intention of delivering the message that the “government will no longer offer the easy profit margins of the past”.
Memorandi of Understanding have been signed with many large suppliers to save money and to buy from them as a single customer. Just before Christmas, it was announced that Xerox and Vertex had just signed up to cost-saving agreements.
Pressure continues to mount on the government to put its procurement house in order, but also on its suppliers, who, let’s face it, must have benefitted substantially from amateurish purchasing by public bodies over a long period of time.
Only this week in the Times, another insider revealed that the NHS was probably wasting a billion a year on procurement, apparently, it was discovered that eight Trusts were buying the same pacemaker for 19 different prices- some wasting up to £750 on each one.
While this all spells good news for taxpayers, I just wonder how much pressure will be exerted by large powerful suppliers on their own suppliers down the line if profit margins get squeezed by more professional Government procurement measures?
Serco was one of the companies involved in the recent summit meetings with the Cabinet Office to reduce costs, and look what they tried to do in response to the threat- sent letters to suppliers asking them to accept a retrospective annual rebate on spend.
However, no taxpayer should criticise the government for doing what it is doing- trying to cut waste has to be applauded, especially if the result is less cuts to frontline services.