Government could save billions by using online procurement, think tank says

An influential think tank says the government could save up to £10bn a year – simply through Whitehall employing e-procurement.

The Reform report on Government procurement says that if the example of Estonia and South Korea is followed, where e-procurement makes up half and 64 per cent of spending respectively, the savings could be significant.

While more can be done, the report does say that e-procurement is growing and if current growth levels are maintained savings of £470m per annum can be achieved by 2020. Overall, it is estimated the digital marketplace has already saved departments 20 per cent on legacy contracts.


Fraught relationship

The authors of the report did however warn that a “somewhat fraught relationship” between the Crown Commercial Service and Government Digital Service could limit Whitehall’s ability to save money and accelerate reform.

In response a Cabinet Office spokesman said: “We’ve saved billions of pounds for taxpayers through our commercial reforms, and the Crown Commercial Service and Government Digital Service will continue to work closely together to introduce the latest innovations and ensure we get the best value from every deal.”

Co-author of the report, Alex Hitchcock, said: “Commercial skills in the civil service are a long-standing concern. Unless the Government improves practice, savings from digital procurement are unlikely to materialise.”

Ravi Thakur, senior vice president for customer success and service delivery at Coupa, commented: “Consumers have been taking advantage of online platforms to make significant saving for a while and we are now beginning to see more businesses deploy procurement software to keep their spend under control while providing a delightful user experience.

“The growth of the e-procurement space is redefining how businesses spend and Whitehall would have a lot to gain by taking up the advice of this report.”

Related reading