By Richard Johnstone | 28 February 2013
Attempts to improve central government procurement are being held back as Whitehall departments are unwilling to make the changes needed to reduce costs, the National Audit Office has found.
The watchdog examined the coalition’s procurement reforms, including the creation of the Government Procurement Service and the chief procurement officer post. They concluded that the changes represented ‘the most coherent approach to reform yet’. Savings of £426m in 2011/12 had been achieved through the centralised procurement of energy, office supplies and travel.
However, Improving government procurement also found that the Cabinet Office had been unable to ensure the changes were applied across all departments, meaning the government was missing out on potential savings.
Although there was now a firmer grip on expenditure, 15 departments missed their 2011/12 targets to centralise the purchase of common goods and services.
In 2011/12, the government spent a total of £45bn through procurement, but only £3bn of that went through the GPS. This is less than half the £7.5bn worth of spending that could be centralised.
Some departments continued to resist signing up to central contracts as they were not convinced that they provided a better deal than their existing arrangements, the report found.
The NAO said departments should comply with the requirement and if they didn’t, the Cabinet Office should be given extra powers such as pooling Whitehall budgets for common goods and services.
‘The Cabinet Office will have to lead a major cultural shift across government if the centralising of buying goods and services is to deliver the significant benefits on offer,’ auditor general Amyas Morse said.
‘There are signs of real progress, but the success of the reforms cannot depend on whether departments choose to co-operate. Departments must commit as much of their procurement expenditure as possible to central contracts and the Government Procurement Service must be held accountable for its performance.’
Responding to the report, a Cabinet Office spokesman said the government inherited a procurement regime that was ‘uncoordinated and bureaucratic’.
He added: ‘We welcome the NAO’s report which recognises our strong progress. Like the NAO, we are convinced that there is much more to do. We will drive reform, acting as a single government customer and ensuring we have first-class commercial skills in place to deliver further savings.
'Our unprecedented reforms to centralise how we buy goods and services by advertising all new contracts online in one place are driving more competitive procurements.’
