The Office of Goverment Commerce and the public sector procurement agency known as Buying Solutions are moving to the Cabinet Office from the treasury.
Some of the comments from those that will lead the new body, known as the Efficiency and Reform Group, suggest costs will be squeezed out.
Sir Peter Gershon who takes charge of procurement issues said the government "will need to be creative and innovative in order to make a real difference and look at new ways of working".
Robert Morgan, director at sourcing consultancy Burnt-Oak Partners, says giving control to the cabinet office, which sits across all other departments, makes sense.
He says this could inevitable lead the government to realise the potential of of government back office sharing. He says if you bring government business processing capabilities together you would have a resource bigger and more efficient than any supplier.
The government could soon have its own Logica.