A powerful Cabinet Office body set up to cut government waste is to determine how all departmental and quango construction spend is procured, Building understands

The Efficiency and Reform Group, chaired by paymaster general Francis Maude, will determine how all spending on “common goods and services” - including construction - should take place. The news came in a letter dated 26 May from Treasury spending director James Richardson to all departments and quangos in the wake of the £6.2bn spending cuts announced by the coalition in May.

The letter says all new consultancy contracts above £20,000 must be signed off by a minister

The Office of Government Commerce, the government’s procurement adviser, will roll out the strategy, reporting in to the Efficiency and Reform Group. The OGC was two weeks ago merged into the Efficiency and Reform Group, set up within the Cabinet Office to oversee spending cuts.

Richardson’s letter said all departments would have to notify the OGC-controlled Construction Client Board of planned spending, including contract renewals.

The process will start with office equipment, travel and IT, but migration to the new system should be complete across all areas, including construction, by March 2011. The letter says the move covers all departments, agencies and non-departmental public bodies, but not councils.

The letter from Richardson also details how the freeze on “unnecessary” consultancy spend announced by then Treasury chief secretary David Laws on 24 May, designed to save up to £1.15bn, will be implemented. It says all new consultancy contracts, including design, above £20,000 must be signed off by a minister. Of all departments and agencies, only the Olympics is excluded.

 

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