New Study Finds Public Procurement in the UK to be the Most Expensive in the EU

UK is most costly public procurement process in the EU

UK is most costly public procurement process in the EU

The UK has the most expensive public procurement process in the EU, this is according to a new research carried out at the Centre for Economics and Business Research (CEBR) in London. The CEBR’s research highlights the need for cost reduction measures to be taken in order to make tendering more affordable for the public sector in the UK. The findings are staggering in that public sector procurement processes are 90% more expensive in the UK compared with the rest of Europe. This must be a cause for concern for our largest trading partner.

 

Procurement costs twice as much in the UK compared with Europe

The average figures break down like this: on average, the total cost of the procurement process is £45,200 with around £8,000 of that fee being incurred by the public sector body that is trying to attract bids. This is in comparison to an EU average of £23,900 in the rest of Europe.

Longest procurement process in Europe is one cause

One of the reasons put forward for the prohibitively expensive bidding process is the length of time it can take in the UK. The research shows that the UK’s purchasing procurement process is the longest in Europe. It takes on average 53 more days than the EU average and 20 days longer than its nearest tardy rival, Italy. The excessive length of the procurement process certainly adds costs and this is one of the reasons why suppliers would be less reluctant to submit a bid.

Worst return on investment for public bodies tendering

Public bodies are looking to get value from the procurement process and the exorbitant costs along with the restrictive length of the tendering process means that less and less suppliers are submitting bids and this is affecting the return on the investment. If the processes were more efficient then suppliers would more determined to tender bids and the public bodies would be able to choose the best option and get a good return on their investment. At the moment this is not the case and there are huge savings to be made on labour alone by shortening the length of the process.

Need to move towards Europe standards

In total the public procurement process in the UK costs the government £8.4 billion. Last year they shaved £750 million off that spend. This research shows that there is a lot more to be saved by meeting EU standards which they have not done in the last few years.

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Posted on July 25, 2013 in Digital Agenda for Europe, e-Commerce, eProcurement, Procure-to-Pay, Procurement, Public Sector, Research by
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