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UK Spending Review: Challenge Or Opportunity? Daniel Ball Reviews the Likely Outcomes for Public Procurement in the Light of the Recent Spending Review (Public Procurement)

Supply Chain Europe 2010, Nov-Dec, 19, 6

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Whatever your political views, from a supplier perspective, the doors have opened in the UK public sector during the last 13 years. The outsourcing of many services, increased reliance on IT and developments in joined up government thinking all created mammoth contracts, which led to the rise (and in a few cases, fall) of many commercial organizations. The time of plenty, however, is over. We are now facing at least 4 years of progressive spending cuts with the objective of saving the UK billions of pounds per year. Recouping three quarters of the UK deficit will come from the tightening of all purse strings as the Comprehensive Spending Review has confirmed. A new austere economic landscape has emerged that will impact both the public and private sectors across the country ... and possibly beyond. Suppliers to the public sector are, in many cases, reeling from these cuts. With plans now firmly geared towards the UK saving rather than spending its way out of deficit, there is a danger that the lifeblood of the UK economy could cease to flow. Without creating commerce, the UK private sector's recession injuries could be harsher, as loss of key contracts and hard driven price reductions makes continuation of business untenable. Or does it? Whether you support the left or right view on how to recover the economy, the question on suppliers' lips will be whether the actions of their public sector customers, the inevitable driving down of prices, reduced contract availability and sheer cost of selling to the sector will become too hard to bear. It is also possible, however, that the need to spend less but keep services running could put agile supply chain operators on a keen footing and even improve their chances of success in the public sector. Let's face it; someone has got to supply the sector if public services are to remain in place, so there's still an opportunity!