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.