Ministers set out plan to procure common services centrally for Whitehall

Nine categories of common goods and services – including professional services – are to be procured centrally for the whole of Whitehall by October 2011, ministers have announced.

Negotiations and legal disputes with strategic suppliers in the nine categories will also be channelled through the Cabinet Office “to harness bulk purchasing and negotiating power”.

The list of goods and services covered by the scheme also includes energy, office solutions, travel, learning and development, and advertising and media.

The move forms part of a package of controls on government spending unveiled by Cabinet Office Minister Francis Maude and Chief Secretary to the Treasury Danny Alexander.

A new Major Projects Authority will be set up and tasked with overseeing the management of all large-scale projects which are funded and delivered by central government. The authority will be part of the Efficiency and Reform Group within the Cabinet Office.

Other measures include:

• All leases and lease extensions over £100,000 and new property freehold purchases will require central approval
• Spending on new information and communications technology contracts with a lifetime value of above £5m will be subject to central approval. “This will ensure best value is achieved and that ICT solutions bought have a common infrastructure and open standards, allowing them to be used across public bodies”
• Only essential expenditure on new advertising and marketing will be allowed. Central approval will be required for government campaign spending over £100,000.
• The temporary freezes on recruitment and consultancy into the Civil Service will continue in the interim, subject to ongoing review. “All Civil Service redundancy schemes will additionally be approved by Cabinet Office before being offered to staff to ensure value for money”.

The government said the proposals would deliver more than £3bn in savings overall by the end of this financial year. They will be in place until the end of the Spending Review period in 2015.

Francis Maude said: “What we have shown today is that if you are prepared to really look, billions can be saved from overheads and unnecessary costs at the centre of the government – without touching front line services. I really hope that when people look at the numbers they too will want to replicate this kind of approach elsewhere in the public sector.

“As well as immediate savings, some of the new measures introduced will enable us in the future to get rid of previous inefficiencies in the way we have bought goods and services and reinforce that as one of the country’s biggest customers – government expects to receive a scale discount.”

Chief Secretary to the Treasury, Danny Alexander, said: “A seismic shift in Whitehall’s spending culture is needed and, building on the measures we have already taken, these new controls are the next stage in delivering that change.”

The government also revealed that it expected to save £800m through renegotiating contracts with key suppliers. It had also saved £48m as a result of its freeze on new property purchases, leases and lease renewals. Government bodies have also vacated some 147 properties.