Nearly half of all central government bodies are losing money because they are failing to take advantage of cheap licences for software and telecommunications, according to a report from the Commons Public Accounts Committee.
Public sector bodies wasted £415m overall in unnecessary procurement costs for goods and services last year, with the low take-up of cheap software licences being one example of wasted expenditure.
The government central purchasing agency, OGCbuying.solutions, which sells goods and services to the public sector, was criticised by the committee for not doing enough to promote money-saving schemes to its customers.
The organisation said that in response it was implementing a “major change programme” which it says will “take forward a range of actions to substantially increase its impact and role in public sector procurement.”
Central government organisations are also failing to use eProcurement despite potential price savings when using eAuctions of 20 to 25% compared to historic prices, the PAC said. The OGCbuying.solutions’ website is also too difficult to use, something it says will be improved.
The committee’s report said 47% of central government organisations do not use the Microsoft memorandum of understanding, which gives a volume-based discount, with 25% being unaware of the scheme.
The problem, the committee said, is that the agency does not have enough business acumen to publicise opportunities available to customers.
They said annual value-for-money savings could increase by £500m if customers used framework agreements operated by the agency, rather than tendering their own contracts.
An OGCbuying.solutions spokesman said, “The new chief executive Alison Littley has initiated a major change programme which will result in a step change in the organisation’s capability to deliver savings in live with the potential outlined in the report.”
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