Government centralising purchases to cut huge waste bill

It follows an efficiency review carried out last October by retail tycoon Sir Philip Green which concluded the Government was not making the most of its scale, buying power and credit rating.

Sir Philip, the owner of Topshop and Bhs, recommended that civil servants should apply the same principles to buying goods and services as if they were spending their own money.

The billionaire said multiple contracts had been signed with major suppliers by different Whitehall departments at different prices.

Examples of the “staggering” amount of money wasted included expensive printing of leaflets, spending up to £117 a night on hotels, £73 on a box of paper while other departments spent £8, and a £2bn a year telecoms bill which Sir Philip said could be cut by up to 40 per cent.

Under the plans, a Government procurement team will be created to contract for widely-used goods and services.

It aims to halt poor-value contracts where Government departments and agencies paid between £350 and £2,000 for the same laptop and between £85 and £240 for the same printer cartridge.

Francis Maude, Minister for the Cabinet Office and Paymaster General, said: “It is bonkers for different parts of Government to be paying vastly different prices for exactly the same goods.

“We are putting a stop to this madness which has been presided over for too long.”

He said central procurement of common items was expected to save more than £3bn a year by 2015 – 25 per cent of the current annual spending on these items.

He added that the Government had made “significant changes” in the last 12 months to reduce procurement spend by £1bn.

Initial goods and services to be procured centrally will include energy, fleet, information and communications technology, office solutions, print and print management, professional services and travel.

Des[pite the huge scale of purchases, Mr Maude also underlined the Government’s commitment to buying more of its products and services from smaller suppliers.