In a report published today, the IoD says the public sector wastes at least £25bn a year through massive duplication of services.
It says through a radical restructuring of public sector procurement £15bn could be saved over the next three years, while greater use of shared services and outsourcing could save £10bn.
IoD director general Miles Templeman says the solution is an integrated public sector procurement and outsourcing structure.
This should include centralised buying organisations that handle all key supplier relationships and all national and major contracts on behalf of the whole public sector. It should also include a single leadership point, for example the Office of Government Commerce, and regional procurement hubs to provide expert contracting support to all bodies in the region.
Templeman says: “The economic situation demands immediate action to reduce public expenditure through implementing the proposals in this paper. There is a lot of talk among politicians about the need to introduce efficiencies into the public sector, but very little detail on how this will be done. The report we publish today provides a vital needed blueprint.”