More savings can be made from better purchasing

The public sector in Scotland is improving its purchasing and estimates it has saved more than £300 million since 2006 as a result. It could now make further savings through increased collaboration and better management.

An Audit Scotland report, Improving public sector purchasing, says the foundations are in place for Scotland’s public bodies to further improve their spending on goods and services, which is worth £8 billion a year. There has been progress in recent years but it has varied across the country and been slower than planned.

The report considers progress with a programme that was aimed at reforming public procurement and making savings of about three per cent a year. The public sector estimates it has saved a total of £327 million in the first two years of the programme, which has cost £61 million so far to implement.

The public sector should increase the use of collaborative contracts. These are a key feature of the programme, but are being developed more slowly than expected. The health sector has been the most successful in this, introducing 150 new contracts and saving £54 million in the two years to 2007/08.

Deputy Auditor General for Scotland Caroline Gardner said:

“The current economic climate means that more than ever, the public sector needs to find cash savings without cutting services or quality.

“The public sector has estimated that more than £300 million of savings have been made since 2006 through buying goods and services better. The public sector is improving its purchasing, and has the foundations in place for further progress. But progress until now has been variable and slower than expected.

“Scottish public spending on goods and services is about £8 billion a year. Because of the public sector’s size and combined purchasing power, there is potential for it to buy goods and services more efficiently and deliver more significant savings.”

Accounts Commission chair John Baillie said:

“Public bodies can make more savings through purchasing well. To do this they need to ensure that staff have the appropriate skills and that better information and management systems are in place.”