16 February 2006 | Rebecca Ellinor

Local authorities will be able to save money on goods and services with the launch of two online products.

The Regional Centres of Excellence (RCEs) are setting up a supplier spend advice service and a database of prices paid covering more than 1,500 commodities.

A meeting of the Chief Executives Task Force last month agreed local government is unlikely to make radical changes to contracting behaviour without evidence that better value for money is obtainable.

As a result the spend analysis tool has been devised to identify the highest, lowest and average prices paid to suppliers for common goods.

Steve Holland, director of the East of England RCE, told SM: "Individual procurement officers at individual councils cannot do these things but the centres can. This is the most important piece of work the centres are doing. A conservative estimate of the efficiency savings in hard cash is at least £300 million over the next two years."

The tool is expected to be online and available to all local authorities before the end of this year.

In addition, the RCEs are setting up a system to offer councils spend advice online. This aims to cut costs by reducing the number of transactions councils make and by working collaboratively to get better prices from suppliers.

Next month the RCEs will run a reverse e-auction for agency staff, computer equipment and other goods, worth £28 million.

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