Bernard Durkan (Kildare North, Fine Gael)
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111. To ask the Minister for Public Expenditure and Reform the extent to which his Department has succeeded in making savings through insurance cost reductions and public procurement in each of the past three years to date in 2014; the extent to which he expects to be in a position to achieve further savings in these areas; and if he will make a statement on the matter. [9960/14]

Brendan Howlin (Wexford, Labour)
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Departments and Offices should make every effort to contain and reduce all administrative costs including both insurance and procurement costs. This approach underpins the current programme of reform of public procurement and is one of the major projects of key strategic importance in the Government's Public Service Reform Plan. Procurement of supplies and services accounts for around €9 billion of current spending by the State per annum. This represents a very significant portion of overall spending and it is, therefore, essential that the Public Service achieves maximum value for money and operational efficiency in its approach to public procurement.

The Office of Government Procurement (OGP) is currently researching the area of insurance across the Public Service.  It is planned to identify the potential opportunities, savings and value for money that may be achieved in this area.

On 1^st January, 2014, the National Procurement Service (NPS) was subsumed into the OGP. Previously, the NPS savings were measured by reference to actual spend and highlighted efficiencies from centralised procurement.  In that context, NPS savings in 2011, 2012 and 2013 were €46.5m, €39.1m and €43.7m respectively.

The Chief Procurement Officer (CPO) has set a target of €500m in net cash savings over a three year period.  The target set for 2014 is €127m.

In relation to plans for further reform of public procurement the new approach will involve:

- integrating procurement policy, strategy and sourcing in one office;

- strengthening spend analytics and data management;

- much greater aggregation of purchasing across public bodies to achieve better value for money;

- examining the specifications set out for goods and services;

- evaluating demand levels to assess how demand and volume can be reduced; and

- strengthening supplier and category management.

These reforms will lead to overall reductions in the cost of goods and services; better procurement services; introduction of technical standardisation; greater levels of professionalism among staff responsible for procurement; and increased performance management of the central procurement function.