Slash state buying costs, say Tories

The Conservative Party is considering setting up a central procurement department in a bid to slash costs out of the Civil Service.

The plan has been put forward by David James, the corporate troubleshooter who is leading a far-reaching review of government spending on behalf of Conservative leader Michael Howard.

Mr James said his team was looking at whether the proposal was "a feasible option" but added: "The costs of procurement are being replicated from one department to another and if one could find a way to combine those into a central procurement department, the scope for savings would be considerable."

Other options being studied include reducing the amount of development work carried out by the Ministry of Defence. "We're perplexed as to why government initiates such a vast amount of independent research and development work," said Mr James. "It seems to us a complete reversal of many principles of the commercial world."

Mr James pointed to the growing controversy over a current order for two aircraft carriers. "Something has to have gone fundamentally wrong, either in the spec, the dialogue between the MoD and the manufacturer, or between the MoD and the Navy themselves over what sort of ships they want. No one's arguing that they shouldn't have their ships but it sounds like a fairly big cock-up." Insiders believe the cost of the carriers could soar to £4bn.

Mr James also hit out at the number of civil servants working for the MoD. "They may be all doing wonderful jobs. But when a sergeant has to lend, at the cost of his own life, the one flak jacket that's available, something's wrong in the way the situation is being looked at."