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Public sector: top tips for stretching budget

Governments across the world are under pressure to improve public services while preventing spending growth, especially in the face of the cost-of-living crisis.
Authored by Jean Davies

What does the new budget tell us?

Last week the chancellor announced the much-anticipated 2024/25 budget, which saw councils core spending power cut by 23.3% in real terms compared to 2010/11 [Local Government Association]. This means that councils have less funds to work during high costs and increasing pressure.

The new budget will see councils across the country entering the financial year in a delicate position with many having to reduce the range of services on offer. The continued squeeze in public spending in the years ahead is a cause for concern for communities.

How does this effect public sector procurement?

If you work in public sector procurement, you’ll find that you may be expected to produce the same results with less. The rising costs in the supply chain and the tight public sector budget will make it challenging for decision makers to make budgets stretch while ensuring value for money. Although budget increases put a strain on public sector buying, there is also the added pressure to consider sustainable purchasing to meet the governments Net Zero by 2050 target. Below are 2 ways that you can make your budget stretch:

Consider a supplier who demonstrates ongoing savings throughout a contract’s lifecycle reviews.

It’s crucial to consider a supplier who demonstrates ongoing savings throughout a contract's lifecycle rather than cost savings for the short-term. To make the budget last, long-term infallible plans must be curated, otherwise they run the risk of exhausting the 12-month budget in a temporary timescale. 
Additionally, it's important to work with local suppliers who can give back to the communities they live and work in. With budget constraints, it’s easy to fall into the trap of partnering with large suppliers with a nationwide presence to lower overall costs, who often do not prioritise social value in local communities. This can lead to councils not meeting DEI and/or sustainability targets.

Joining a purchasing alliance or consortium.

Amid budget constraints councils and educational institutes alike could look to join specialist consortiums such as The Libraries Consortium. Joining a purchasing alliance or consortium enables councils to distribute resources, labour and responsibilities across members which further reduces costs, saves time, and creates new products or services.

They also offer the opportunity for a collaboration, special initiatives and training which has the potential to further reduce costs. Additionally, joining alliances and consortiums can grant access to funding resources that can award money to members for various projects enabling councils and educational institutes to stretch their budgets and put them to better use. Learn more about our partnership with the Libraries Consortium here.

Click here to discover more ways that you can boost your public sector budget.

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