Major change in strategy and practice needed to cut public procurement bill

The National Audit Office has weighed in with its views on what is needed to achieve the targeted cut in government spending of £1bn over three years. This will only be met, says the NAO, if there is a 'sea-change' in approach.

Three key issues are highlighted for action:

• decisions about the £9bn spent annually on 'strategically important' goods and services should be open to more influence by procurement staff
  
  
• routine purchasing must be more efficient - the NAO says that for the 2-3 million orders each year for goods averaging £100, processing costs are anywhere from £25 to £100
  
  
• clearer procedures are needed to spell out how the government's ambitious targets for purchasing via e-commerce can be achieved.

Currently, 1500 staff spend about £13bn each year on civil procurement. A new Office of Government Commerce, created to get control over this, opens its doors on 1 April 2000. Its first chief executive is expected to be appointed before the end of this year.

Elliott Chase