Maude says centralised procurement will save government £3bn a year

The creation of a central government procurement team will save the government £3bn a year, according to Minister for the Cabinet Office Francis Maude.

If the projections are accurate then overall spend on energy, fleet, information and communications technology, office solutions, print and print management, professional services and travel will be reduced by a quarter.

The government procurement team will be headed by government chief procurement officer John Collington, who was appointed in August last year.

Collington will liaise with Buying Solutions, the goverment's procurement partner, to create "better streamlined, more efficient practices", according to the Cabinet Office. He will also work with buying teams from inside each department with expertise in particular goods and services.The procurement strategy will progress the government's pledge to increase the use of SMEs within the government supply chain.

These commitments were made in a report called Small and Medium Enterprise Action Plans, which also demonstrates how each government department will seek to achieve the government's objective to do 25 per cent of its business with SMEs.

Other pledges to improve the lot of SME suppliers include greater use of the "open" procurement procedure, which has already increased by 12 per cent across the public sector between March and April alone. This ensures that all suitable suppliers have their tender proposals considered.

SMEs will further benefit from five Dragons' Den-style "product surgeries". These will allow SMEs to pitch innovative proposals directly to government.

These follow the success of the Innovation Launch Pad, launched by the Cabinet Office in March, and closed in April.

Maude said: "It is bonkers that different parts of government are paying vastly different prices for exactly the same goods.

"In the last year, we have already made significant changes to drive down procurement spend by £1bn, but this new centralised service means we will continue to deliver savings that are expected to reach more than £3bn a year.

"We are also determined to press ahead with creating a more level playing field so that small organisations and businesses can compete fairly with bigger companies for government contracts."

The move follows an Efficiency Review from Philip Green released last October arguing that the government's procurement system was crazy.

Green's report cited huge differences in expenditure, with government departments and agencies spending between £350 and £2,000 for the same laptop and between £85 and £240 for the same printer cartridge from the same supplier.