04 April 2003
The Prison Service is missing out on potential savings because its procurement procedures are too fragmented, according to the National Audit Office.
The public spending watchdog found that while the best prisons worked together to take advantage of centrally negotiated contracts to cut costs, many still take an ad hoc approach to the procurement of goods and services.
Its report said in many institutions there was no single member of staff with overall responsibility for procurement.
Inspectors also identified this as the primary reason for the wide variation in procurement administration costs – from £50,000 to £250,000 – between prisons of the same size.
The NAO urged the Prison Service to proceed with plans, postponed in 2001, to set up a nationwide IT system to manage order processing and stock control. 'Communication between the central procurement team and prisons is likely to be improved,' it suggested.
Inspectors praised the service's efforts to make savings in recent years, noting that it reported a saving of £5.8m in 2001/02 and a projected £6m for the current financial year.
Comptroller and auditor general Sir John Bourn welcomed the progress that had been made. He added: 'Further financial savings can be achieved by streamlining procurement activities, reducing stock levels and maximising the benefits of the service's purchasing power through central contracts and locally negotiated contracts covering several prisons.'
PFapr2003
