Procurement key to meeting spending review targets

Several government departments have said that changes to their procurement strategies will be crucial in coping with government spending cuts. In a video response to last week’s Spending Review, defence secretary Philip Hammond announced that some of its purchasing duties would be handed to the Cabinet Office. The Ministry of Defence (MoD) will see its resource budget frozen at £23.9 billion over the course of 2015-16. Mr Hammond said that £300 million in savings would come from the deal with cabinet secretary Francis Maude, whose department will be responsible for some of MoD’s commodity and IT purchasing. Meanwhile, the Home Office will see its policing budget cut by as much as 6.6 per cent, but said that “smarter procurement” would enable it to survive with fewer resources. But police unions have already raised concerns about the reductions. Chief constable Nick Gargan, national policing lead for finance and resources in the Association of Chief Police Officers, said that police leaders would do their best to make sure budget cuts had minimal impact on frontline staff. However, he added that continual cuts are taking their toll. “If this continues some forces will be left at the limit of their viability within a couple of years,” he added. Some trade associations have been more positive about the potential role of procurement in cost-cutting measures. George Lee, national director of the Road Safety Markings Association, says that more efficient and consistent procurement within the highways sector would prevent waste and make “significant savings”. Even though the Department of Health is one of the few departments to escape cuts and will even see a small increase in its budget, officials have been set the target of saving £1 billion by improving its procurement strategies. Health secretary Jeremy Hunt said that the NHS will continue to be protected, but that the arrangement will help to make sure that the country gets the best value for money. In total, chancellor George Osborne announced cuts last week amounting to £11.5 billion, with nearly every department affected.