Treasury plans better buying

Plans for a radical overhaul of the procedures for pounds 75bn-worth of central and local government purchasing are to be announced in a Treasury White Paper this morning.

The Treasury wants to introduce new private sector disciplines into government procurement, as a contribution to the competitiveness programme launched a year ago by Michael Heseltine, President of the Board of Trade.

The procurement project at the Treasury is headed by Neil Deverill, a businessman recruited from Electrolux, the consumer electrical company.

Mr Heseltine's second competitiveness White Paper is to be published today at the same time as the Treasury White Paper, alongside new strategies for science and engineering and a "technology foresight" programme to smooth the introduction of new technology to industry. There will also be a boost to export promotion for small and medium businesses, helping to feed data to them from government offices in the regions.

Mr Heseltine wants to make the competitiveness exercise a rolling event, possibly every year, which will audit attempts to improve the competitiveness of British industry by producing a progress report, while at the same time launching initiatives in what will in effect be a rolling programme.

The new Heseltine White Paper will develop last year's by looking at the needs of individual industrial sectors. This is similar to the work done by the now-defunct National Economic Development Office, though Mr Heseltine's civil servants claim that it is done much more effectively.

The Treasury White Paper will focus on improving links with suppliers, training procurement experts in government and introducing private sector management practices that will monitor the effectiveness of each step in a particular purchase.

A Treasury source described the changes as "throwing out existing procedures and starting with a lot of new ones, streamlining procurement and creating state of the art expertise".

A key objective will be to prevent the large cost overruns that have been a routine target of criticisms by the parliamentary Public Accounts Committee over the years.

The Treasury aims to ensure that 75 per cent of key procurement staff in central government have professional qualifications by the end of next year.

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