Managing contract terms and commitments will be critical following the Government spending review

The United Kingdom, like many countries, is straddled with an unprecedented level of debt.  The UK’s debt currently stands at over £900 billion ($1.4 trillion), or £33,000 for every person in employment.  In an attempt to bring this national debt down to a manageable level, David Cameron’s government will publish the results of its long-awaited Spending Review on the 20th of October.

The Spending Review will highlight areas where costs can be saved in central government departments and local authorities.  The United Kingdom will join counties like France and Ireland and introduce draconian austerity policies to reduce the national debt.

Much has been reported about Government quangos being abolished, defence cuts that will deliver new aircraft carriers, but with no aircraft and a winter of discontent with public sector workers planning widespread strikes in a move to resist the cuts.

Sir Philip Green’s report that was published last week provides an insight in to some of the areas of government where significant cost can be saved, namely more effective procurement and supplier contract management.

There is no doubt that if you are a department head or a manager in a central government department, local authority, university or hospital, you will be under more pressure than ever before to reduce costs and expenditure.  It is likely that spending cuts will lead to more services being outsourced, which will only lead to greater pressure to manage external service providers even more closely.

Contract Management software solutions should be able to offer significant value here.  Not only do Contract Lifecycle Management solutions help to streamline and control the contracting process with external suppliers, they also provide invaluable tools to make contract oversight and performance something that can be controlled and measured. 

If an outsourcing agreement includes complex obligations and service level agreements (SLAs), these can often be missed or poorly managed.  Solutions, like Dolphin Contract Manager, have been designed to make contract obligations and commitments more visible and better controlled.  A National Audit Office report last year highlighted over £300 million in savings in central government IT contracts alone, through better contract management. 

The British government should absolutely look to cut unnecessary cost from budgets, but it should also look to use technology in a smart way to improve the efficiency and effectiveness of government procurement at the same time.

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