The actions that the UK government took to support the economy in response to the COVID-19 crisis had a massive effect on public sector finances, as have more recent measures such as the introduction of the Energy Price Guarantee and the tax cuts announced by the Chancellor in September 2022. The Institute for Fiscal Studies estimates that borrowing in 2022/23 will reach £190 billion, representing 7.5% of national income, with debt continuing to rise.
As a result, pressure from the centre to manage costs is enormous and, given the government’s determination to demonstrate an on-going commitment to financial prudence, all parts of the public sector are continually obliged to demonstrate that they are buying competitively.
Although many departments made considerable progress during the years of austerity, identifying cost reductions on an on-going basis inevitably becomes more difficult once the ‘easy wins’ have been captured. And many public sector bodies lack the resources and experience in-house to capture all of the cost reduction available to them despite attempts from the centre to standardise buying.
Nelson La Rochelle has considerable experience of cost reduction in the public sector.
We regularly work with NHS, local government and educational clients helping them to identify such reductions, and understand the regulations governing their procurement.
Clients have included the country’s largest NHS foundation trust, for which we negotiated a price reduction of almost £750,000 over three years, several district councils and many universities including Loughborough, Bath, Liverpool and Derby.
We reduced the University of Derby’s costs by up to 59% in several categories of expenditure. We did so on a genuine and sustainable basis with minimal disruption to its day-to-day operations and are confident of our ability to reduce the costs of other public sector bodies.