The Minister for Cabinet Office Francis Maude today announced that the Coalition Government is due to make savings of up to £3 billion a year by changing the way it procures essential items such as stationery and office services.
These changes include the establishment of a central team, Government Procurement, to contract goods and services for Government as a whole, rather than individual departments signing up to poor value contracts.
This alone is expected save up to £3 billion a year by 2015, a quarter of all spending on these items.
The Minister also announced today that the Government has already saved £1 billion from tighter and more efficient spending on discretionary goods and services.
Francis Maude said: "It is bonkers for different parts of Government to be paying vastly different prices for exactly the same goods. We are putting a stop to this madness which has been presided over for too long. Until recently, there wasn't even any proper central data on procurement spending."
In addition, Mr Maude published plans setting out how each Government Department will seek to fulfil an aspiration to do 25% of business with Small and Medium Enterprises (SMEs). Commitments made today included greater use of the 'open' procurement procedure and five further 'Product Surgeries' whereby SMEs can pitch their innovative proposals directly to Government.
"We are also determined to press ahead with measures to create a more level playing field so that small organisations and businesses can compete fairly with bigger companies for Government contracts. SMEs can provide better value and more innovative solutions for Government and the actions set out today will support their growth as the economy starts to recover."