The measures that the UK government has taken to support the economy in response to the COVID-19 crisis have had a massive effect on public sector finances. Borrowing was around £300 billion in 2020/21, the highest level since the end of World War II, while underlying debt is forecast to remain at more than 80% of GDP until at least 2026/27.
And taking account of the need to replace EU funding, together with the Government’s desire to demonstrate on-going financial prudence following the real terms spending rises set out in the October 2021 Budget, the pressure to manage costs is enormous.
As a result, all parts of the public sector remain under very great pressure to demonstrate that they are buying competitively.
Although many departments made significant 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.