Purchasing Initiatives (Hansard, 25 March 1987)

§ 13. Mr. Greenway
asked the Secretary of State for Trade and Industry if he will make a further statement on the implementation of his Department's public purchasing initiatives.

§ Mr. Butcher
The public sector spends about £40 billion each year on assets, goods and services. My Department is enhancing its programme to promote, with public bodies and their suppliers, the advantages of positive purchasing with the aim of achieving value for money in this spending and, at the same time, improved competitiveness in firms.

§ Mr. Greenway
Does my hon. Friend agree that a more efficient expenditure of that enormous sum of money could have a dramatic impact upon our economy? Will he do all that he can to achieve, say, at least a 5 per cent. improvement in the efficiency of the spending of that cash this year? Will he do the same in future years, if he can?

§ Mr. Butcher
There are two objectives of my Department's public purchasing initiative. The first is to support the central unit on purchasing on value for money. Secondly, through the application of the principle of positive purchasing, we seek to ensure that, when the money is spent, a number of British companies become more competitive as a result of enlightened purchasing procedures and, therefore, supply more products into these contracts.

§ Mr. Tony Lloyd
Does the Minister accept the fact that given the size of the public sector and its purchases there is a real opportunity to use it to encourage regional industry, such as in the northern region and the north-west of Scotland, and so on? There should be a specific and clear criterion. The Minister did not mention that, but said that he would take this regional distribution of purchasing into account to support the industries.

§ Mr. Butcher
I am grateful to the hon. Gentleman for his observation. He is anticipating a certain part of our thinking on the public purchasing initiative. We have now agreed guidelines for the PPI principles, and we shall be pleased to present them either on a sectoral basis or on a regional basis. However, I accept the hon. Gentleman's point.