By Vivienne Russell | 17 June 2011Better procurement could save local government £10bn every year, the Department for Communities and Local Government said today.
Its report, prepared by analytics company Opera Solutions, gives the highest estimate yet of potential procurement savings.
Opera examined spending on energy, mobile phones and legal services across three local authorities. They estimated that by consolidating spend, the councils could collectively, shave 10% off their bills – saving £1.44m.
Savings of up to 20% could be achieved across the sector’s £52bn spending on procurement, Opera says, amounting to up to £10bn.
Commenting on the findings, Local Government Secretary Eric Pickles said: ‘Let there be no doubt whatsoever – today’s figures show that there is significant scope for councils to make taxpayers’ money work even hard.
‘We’ve always said that sunlight is the best disinfectant, and the availability of financial data has helped identify numerous ways that councils can reduce expenditure while offering the same or better services to residents.’
The research also identified a lack of procurement expertise among council staff and fears that joining forces with other councils would result in a loss of control.
The report also urges councils to make better use of spending data to identify incorrect payments and eliminate duplication and fraud.