Press Release - A review of collaborative procurement across
the public sector
21 May 2010
More savings possible through better collaborative
procurement
The National Audit Office and the Audit Commission have today
called for public bodies to work together much more effectively
than they currently do to maximise savings from procurement
activities.
The public sector procurement landscape is fragmented, with no
overall governance. There are nearly 50 professional buying
organisations, as well as individual public bodies running
commercial and procurement functions. Many of these organisations
operate framework agreements for similar goods and services.
The implications for value for money are clear. Public bodies
are incurring unnecessary administration costs by duplicating
procurement activity. In addition, the public sector is paying a
wide range of prices for the same commodities, even within the
existing collaborative arrangements. For example, there was a 116
per cent (£6.84 to £14.79) variation between the lowest and highest
prices paid for the same broad specification of paper. The
difference was 169 per cent (£65 to £175) for LCD computer
monitors.
The public sector is not maximising its significant purchasing
power. There are a large number of framework agreements and
organisations are not exploiting the potential benefits of volume
when using these agreements. There are also few constraints on
brand or specification choice.
In 2007, the Office of Government Commerce established a
Collaborative Procurement Programme which has led to some real
improvements to the way public bodies buy goods and services and is
managing over £18 billion of spend under nine categories of goods
and services. However, a step change in public sector procurement
is now required, which builds on the Office of Government
Commerce’s existing work.
Mr Amyas Morse, head of the National Audit Office, said
today:
“The public sector spends £220 billion a year on goods
and services. Given the potential to make significant savings, it
is vital that there is much better coordination of procurement
activities to ensure value for money is secured across the public
sector.”
Mr Eugene Sullivan, Chief Executive of the Audit
Commission, said today:
“With all public service costs under pressure, better
procurement provides an opportunity to make significant savings
that don’t cut into front line services. Most councils already
collaborate but, even where there is collaboration, it is not
delivering all the possible benefits”
Notes for Editors
- Today's review, A review of collaborative procurement across
the public sector, is available from the National Audit Office
website (www.nao.org.uk) and the Audit Commission website
(www.audit-commission.gov.uk).
- The Comptroller and Auditor General, Amyas Morse, is the head
of the National Audit Office which employs some 900 staff. He and
the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
- The Audit Commission is an independent watchdog, driving
economy, efficiency and effectiveness in local public services to
deliver better outcomes for everyone. Our work across local
government, health, housing, community safety and fire and rescue
services means that we have a unique perspective. We promote value
for money for taxpayers, auditing the £200 billion spent by 11,000
public bodies. As a force for improvement, we work in partnership
to assess local public services and make practical recommendations
for promoting a better quality of life for local people.
- Framework agreement: covers the procurement of a particular
type of good or service from pre-approved supplier(s) over a fixed
period of time. The agreement usually sets some of the terms and
conditions under which the supplier will enter into contracts with
customers.
Press Notice 25/10
All enquiries to Phil Groves, NAO
Press Office: Tel: 020 7798 5339
Mobile: 07770 678477
Nigel Watts, Audit Commission Press Office: Tel:
0844 798 2128 (24 hours)
Mobile: 07813 315538