There’s been a warning that there needs to be a sea-change in approach to Government procurement if target savings of a billion pounds are to be met.Sir John Bourn, Head of the National Audit Office, has told Parliament that its plans to make the savings through the creation of the Office of Government Commerce won’t work unless backed by a strategic overhaul in thinking about procurement.
He says procurement staff need the authority and backing to use their skills to introduce cost reductions in all major purchasing decisions.
Processing costs must be much further reduced. In some cases it can cost almost as much to process the payment as to pay for the goods. Sir John recommends much wider use of the Government Procurement Card and G-Cat, a catalogue of IT software and equipment.
And he has warned that unless the Government sets clear targets about ordering via e-commerce, most procurement staff will continue to use the telephone because seems easier.
Some 1,500 people spend some Â£13billion each year on civil procurement across government. The Office of Government Commerce will be set up from 1 April 2000 as an office of the Treasury. It will take responsibility for the Treasury Procurement Group, the Buying Agency, Property Advisers to the Civil Estate and the Central Computer and Telecommunications Agency. It is expected the office’s new chief executive will be appointed in November 1999.