Coalition tells top suppliers to cut the cost of services
FRANCIS Maude, the minister for the Cabinet Office, yesterday hauled in the bosses of blue-chip companies and asked them to cut the cost of the services they provide to the government.
Nineteen chief executives, from the likes of Serco, BT, Logica and Vodafone, were summoned to the meeting and told to do their bit to reduce Britain’s budget deficit.
Maude told the bosses to prepare for a round of tough negotiations, designed to reduce the amount the government pays to private suppliers and contractors.
Cabinet Office officials said there would be some impact on suppliers’ profits, but added they hoped to minimise it by rooting out waste and inefficiency. The negotiations will be handled by Maude and Danny Alexander, the chief secretary to the Treasury.
Maude said: “I am laying down the challenge to major government suppliers to ask them what they can do to take costs out of contracts.
“Some of this will come out of margins, but we will also invite ideas on how we can structure things differently to reduce complexity and cost.”