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Efficiency and Reform Group 'has saved over £3bn'

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The Efficiency and Reform Group (ERG) has helped to save government £3bn-£4bn over the past few months, its lead official has told a group of MPs.

Ian Watmore, the government's chief operating officer, was responding to questions at parliament's public accounts committee hearing on the efficiency landscape. He said that, while the figures are still being audited, he was "pretty certain" that the total was more than £3bn, and that £800m of this came from calling in major suppliers to review their existing contracts.

Over the past few months the Cabinet Office has agreed memoranda of understanding with a number of major suppliers to provide savings. IT accounts for a significant proportion of the business, and Watmore mentioned BT, HP and Fujitsu as companies with which there had been negotiations.

"The generality of what we did with suppliers was to get them to reduce their prices," he said.

Watmore said that such measures have produced short term savings, but that the effort to improve efficiency in the longer term will require a more systemic change throughout Whitehall.

"Long term, we need to change the culture of how Whitehall departments are run and procurement is done," he said, adding that there is a need for more implementation skills at senior level.

He emphasised the government's desire to increase the share of its business going to small and medium enterprises (SMEs), saying that even though big deals with single suppliers could provide early cash gains, they can lock government into arrangements that make it harder to find long term savings. The ERG is looking at ways to specify procurements to make it easier for SMEs to participate.

Watmore also highlighted a problem in comparing the performance of government departments in obtaining efficiencies, that they often have different ways of collecting statistics and recording what they pay for products and services. He cited the example of the cost of laptops, saying that some departments provided the cost simply of the hardware, while others would sum it up as a more expensive managed service.

"Sorting out that kind of thing is really hard for us to do," he said.

This article was originally published at Guardian Government Computing.

Guardian Government Computing is a business division of Guardian Professional, and covers the latest news and analysis of public sector technology. For updates on public sector IT, join the Government Computing Network here.

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