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Public sector needs better buying skills, says NAO

28 April 2011

A new report from the National Audit Office (NAO) has suggested many public sector bodies are ill equipped to secure value for money when negotiating large contracts.

The study examined the success of the government's private finance initiatives (PFI) and made a series of recommendations regarding the improvement of buying processes.

Head of the NAO Amyas Morse identified a need for "tougher negotiation" and said the public sector should act as "a more demanding and intelligent customer" when arranging large-scale infrastructure deals.

According to the report, applying the lessons learnt from the PFI programme could help the government to achieve its target of achieving annual cost savings of between £2 billion and £3 billion in infrastructure delivery.

"The lack of commercial skills to match those of the private sector can put the public sector at a disadvantage in the negotiation and management of contracts," the NAO concluded.

Raj Tulsiani, vice-chair of the Interim Management Association, recently told Recruiter that the government should remove restrictive procurement frameworks to create more opportunities for small and medium-sized enterprises.

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Categories: Central Government

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