Immediate Whitehall cuts of £6bn have now been tabled by the new government as the first stage of deficit repair, with savings expected to be made in three areas: reduced public sector recruitment, scrapping IT projects and renegotiating contracts with dozens of Whitehall suppliers.
But swift and rapid savings don’t necessarily need to mean swingeing service cuts, nor should they impact on IT expenditure where there is a swift and highly tangible ROI case.. It’s possible within the space of weeks to achieve contract savings of over 10-20 percent in many areas through well targeted supplier auction events for example, yet many government departments still don’t have a consistent e-auctions policy.
Some of the realised savings from auctions could then be invested in automating public sector buying, ensuring that all spend is on contract and enabling buyers across multiple public sector bodies to collaborate more effectively on purchasing to create a win-win situation of lower prices for buyers and higher volumes for selected suppliers, with process cost savings for both.
Addressing the complexity of purchasing and spending is the real challenge the new government faces but that will not be solved by a slash and slice mentality. There is a proven path to rapid cost savings without bringing valuable long term initiatives to a halt and forcing unnecessary headcount cuts.
