No, you haven’t read that incorrectly. This is in relation to the article produced in this month’s Supply Management (click here) regarding the £800M saving attributed to central government as a result of contract renegotiation.
Having been a civil servant for the first 19 years of my career, I tend to regard all such claims with a liberal pinch of salt – more like the contents of a gritting lorry if the truth were known. But not this time round. I think it is likely to be true for the following reasons:
The article mentions words such as ‘negotiation’, ‘margins’ and ‘single customer’ – all of which are associated with cashable savings. Also notice no references to creating more framework contracts.
So who should be learning from UK central government? UK local government in the first instance! I have been urging this approach for several years now and it is always deemed too difficult, or even illegal under EU rules. I repeat again – UK local government could easily take 15% off its direct procurement costs by smarter engagement – see the London Procurement Strategy (click here). This would be a very timely and profitable lesson.