§ The Prime Minister
Following "Government Purchasing" a central unit on purchasing was established. The Treasury is publishing tomorrow the unit's report on 1986–87, its first full year of operation. A copy of the report will be placed in the Library of the House.
The unit's roles is to provide advice and assistance to Departments in improving the effectiveness and efficiency of their purchasing and supply activities. Mr. Michael 115W Willacy is director of the unit on secondment from Shell UK. About half its small staff are similarly on secondment from private sector companies.
A target was set to achieve value-for-money improvements of £400 million a year from Government Departments' purchasing and stockholding by April 1987. The unit records that in 1986–87 central Government Departments (excluding the Ministry of Defence, which is not covered by this report) achieved value for money improvements totalling £286 million, equivalent to 4.7 per cent. of total expenditure on purchases of goods and services of some £6 billion in that year. The report also notes that Departments are becoming more aware of the potential of small firms to provide value for money in purchasing and supply, and that some Departments have taken worthwhile initiatives to encourage small firms.
For 1987–88 Departments (again excluding Ministry of Defence) have set targets for value-for-money improvements totalling £388 million, and for 1988–89 targets totalling £447 million, equivalent to some 7 per cent. of forecast expenditure on goods and services in that year. The report emphasises that a great deal remains to be done, including taking better advantage of the potential of small firms to provide value for money. But the achievements to date and the more ambitious targets Departments are now setting themselves for the future are encouraging.