Tighter procurement rules have saved the British government £10 billion in the last three years through savvy purchasing of everything from IT to cellphone services.
The British taxpayer is £10 billion ($15 billion) better off due to cost-saving initiatives, including changes to the way information and communications technology (ICT) is procured, reported the U.K. government Monday.
The figure refers to what tightened rules have shaved off Whitehall's operating expenses by the cost-focused Coalition government since it came to power in May 2010. The figure is also £2 billion ($3.1 billion) above the £8 billion savings target the Coalition set when it came into office. To put the reduction in context, U.K. central government spends around £63 billion ($97 billion) on goods and services every year.
Cabinet Office minister Francis Maude, whose team has led the war on waste, said that the government is on target toward managing its finances "like the best-run FTSE 100 businesses." As an example, he told The Sun this weekend about a government department that was paying £4 million ($6 million) for a service contract, until he found a firm that would do the same job for £60,000 ($92,000). Maude also said his own Cabinet Office planned to spend £57 ($87) on a £20 ($31) computer cable until he stepped in.
A political colleague claimed cutting waste like this means taxpayers' money can be focused on "building a stronger economy in a fairer society" instead. More is to come; the Coalition said it is now pushing to save £20 billion ($31 billion) a year by 2015 versus 2009-10 spending levels.
Specifically the government said in its annual report that it has cut £800 million ($1.3 billion) from its running expenses by better coordinated, central buying of common goods and services, including ICT. This refers to a review by British retail entrepreneur Sir Philip Green that found suppliers were able to reap big profits out of selling the same services to different parts of government at different prices -- like 78% worth of difference in printer cartridge costs, for instance. Working as a single customer across government enables public sector leaders to better identify efficiencies and maximize their collective buying power, said the Cabinet Office. One telecom contract renegotiation contributed £126 million ($193 million) alone, for example.
The Cabinet Office also said savings came from a clampdown on the use of external consultants by civil servants, a firm hand on recruitment and non-IT cost-cutting measures, such as selling property.
And, it said £500 million ($767 million) was saved through "IT spend controls and moving government services and transactions onto digital platforms," and £42 million ($64 million) by simply creating one single government website, GOV.UK, for citizens and ceasing to run multiple Whitehall online identities.
. We've got a management crisis right now, and we've also got an engagement crisis. Could the two be linked? Tune in for the next installment of IT Life Radio, Wednesday May 20th at 3PM ET to find out.