Government departments are dragging their feet in the use of central contracts to procure goods and services. Without action by the Cabinet Office the predicted savings will not be achieved. The warning comes from the National Audit Office.

Following changes in 2010 when a Chief Procurement Officer was appointed and central contracts negotiated, departments achieved a one percent saving through central procurement. There have been problems in implementing the reforms, including ineffective governance structures, unrealistic targets, incomplete data and weaknesses in contract management.

Government is not maximising the potential for savings through centralised procurement. It has succeeded in increasing spending through central contracts from £2.6 billion in 2009-10 to £3 billion in 2011-12 but this is still less than half of its spending on common goods and services. The Cabinet Office’s most recent forecast is that this will grow to £5.3 billion in 2012-13.

There are some operational issues with GPS’s management of the central contracts, with departments raising concerns about the inconsistency of contract management and the quality of customer service. While departments need to make compromises and adapt to a more standardised approach, there are cases where the central contracts do not meet departments’ operational needs, in part due to a lack of consultation when developing the specifications. These weaknesses in implementation mean that the centralised approach is not releasing procurement resources in departments as originally expected.

Roles and responsibilities for day-to-day contract management are unclear and there are inadequate mechanisms by which departments and the centre of government can hold each other to account.

Amyas Morse, head of the National Audit Office, said: “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.

“There are signs of real progress, but the success of the reforms cannot depend on whether departments choose to cooperate. 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.”