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Smarter IT procurement saves government £196m

The government has saved £196.7m in a year by introducing IT procurement processes that are more collaborative.

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The government has saved £196.7m in a year by introducing IT procurement processes that are more collaborative...

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The Office of Government Commerce (OGC) reported a total of £1.4bn savings in its annual statement, with IT making up a significant portion.

The OGC has attempted to overhaul the way government departments and other parts of the public sector buy equipment. E-procurement tools have enabled public sector organisations to collaborate over prices and purchasing, pushing prices down and buying in bulk.

The public sector spends about £220bn on goods and services each year. The annual statement said tools such as e-auctions have made a difference to prices. Since 2005 ten collaborative IT hardware e-auctions, involving 144 public sector stakeholders, have led to savings of £43.8m.

The OGC contracts database has also contributed to savings. The database holds a central register of 400 deals, giving easy access to good value contracts.

Further savings of £75m are expected over the next five years from a software licensing deal with Microsoft. The report says the deal will "enable customers to buy Microsoft licences tailored to their individual needs rather than standard packages for the first time". The OGC says this will reduce unnecessary costs.

Nigel Smith, chief executive of the OGC, said, "A great deal of progress has been made in the last year in improving commercial and procurement practices across Whitehall and in the wider public sector. Getting maximum value from government spend has never been more important than now, and the OGC is helping the public sector deliver this. The momentum we have seen over the past year must be maintained if we are to deliver the savings potentials that have been identified through the Operational Efficiency Programme."

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