We are testing a new beta website for gov.scot go to new site

Review of Public Procurement in Scotland - Report and Recommendations

Listen

18 Scottish Executive Savings Commentary

Background

As part of its Efficient Government programme the Scottish Executive has set and published financial savings targets for Public Sector procurement expenditure. These are as follows. The periods shown are fiscal, i.e. year ended 31 March.

2005/6 £m

2006/7 £m

2007/8 £m

Health

33

40

50

Other Units

50

100

150

83

140

200

Findings

As indicated earlier in this review there is a need to more formally define both the baseline and the standardised methodology to be utilised in measuring procurement savings. However, based on my Review and the improvement opportunities available, I have assessed current and projected procurement savings and the improvement opportunities available for achievement potential as follows.

The short-term savings for this year (2005/6), which represent a little over 1% of procurement expenditure, should be met through existing momentum. The following year (2006/7) set at £140m can be met only if the urgent attention required to address governance and accountability issues is completed and there is also some progress on advanced procurement as recommended by this report. Much more progress in the area of advanced procurement will be required to deliver 2007/8's annual savings of £200m. However, this potential progress, if solidified into superior performance, is capable of providing savings in 2008/9 and 2009/10 in excess of those already targeted. £400m is, in my opinion, a realistic minimum target for 2008/9 and £600m for 2009/10. This would provide cumulative savings over these five years of close to £1.5bn.

As the procurement capability improves and fills the gap in performance, then year-to-year annual savings will eventually stabilise, but they should do so at a substantial ongoing level of benefit.