Centralised government purchasing saves taxpayer £2m, claims Treasury

Money is being saved by the introduction of a centralised procurement service, it is claimed

Money is being saved by the introduction of a centralised procurement service, it is claimed

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Introduction of a centralised government procurement service has helped generate savings of more than £2 million over the past two years.

Treasury Minister Eddie Teare said that before a specialist procurement team based within Treasury was created in April 2011, there had been occasions when different government departments had been paying different prices for the same goods from the same supplier.

He said the new co-ordinated approach to buying goods and services is continuing to make an important contribution to the rebalancing of public finances.

Mr Teare said it had been expected the new approach would achieve savings of just under £1 million. However, it has also produced savings of £1.3 million and with some contracts running over three to four years, the figure was in excess of £2 million.

He said: ‘Government spends a considerable amount of money on the things it needs to provide a comprehensive range of services to the Manx public, so it made sense for departments to work together to achieve the best deal for the taxpayer.

‘I am pleased to say that the success of the central team has exceeded our initial expectations, with savings in excess of £2 million.’

He added: ‘Driving forward efficiencies and cost savings in the public sector is absolutely vital in the current financial climate. Procurement also has a wider role to play in terms of stimulating the local economy and ensuring government spends money on behalf of the taxpayer in a fair, open and transparent manner.’

The seven-strong central team is led by Neil Davidson, government’s head of procurement. In addition to securing cost savings through a more consistent and joined-up approach to purchasing, the team was also set up to ensure contracts are awarded as the result of a clear and open competition, all suppliers are given the opportunity to bid for government contracts and all suppliers are treated fairly and equally.

Mr Teare said the new approach had taken away the perception that there was a ‘magic circle’ of companies that were always successful at winning contracts. Collaborative working between Treasury and other departments has resulted in a 150 per cent increase in government tender activity, and the development of a new standard tender process which is far quicker than its UK equivalent.

Alex Downie MLC, who will chair the recently established Procurement Committee, said: ‘Procurement has a key role to play. The centralised team is making a real impact on public sector purchasing.’

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