11 September 2006 | Paul Snell

Norfolk County Council has achieved a 20 per cent reduction on its postal delivery budget by using a reverse e-auction to secure a new supplier.

Analysis carried out on behalf of the council by Civica revealed it previously spent around £1.1 million a year on postal delivery services. The authority estimates it has saved around £200,000 by renegotiating the contract.

The e-auction was held following a tender for postal services issued by the Eastern Shires Purchasing Organisation on behalf of the council. Mail service provider TNT outbid UK Mail in the e-auction to secure the deal. The council said it was impressed by the company's ability to provide more management information than it currently gets from Royal Mail. This includes figures such as the percentage of post being hand-sorted or the number of incomplete addresses sent out.

But the council told SM Royal Mail's new "pricing in proportion" system (News, 7 September), which charges for mail delivery according to its shape and size as well as weight, was not the catalyst for change. Colin Bottjer, contracts and purchasing manager at the council, said: "It's a matter of being smarter in everything we do and changing our procurement strategy."

Savings derived from this deal will contribute to the overall £30 million target the council is expected to achieve by 2008. This figure includes the council's own money-saving aims, and those of the Gershon review which require all local councils to make £3 billion of efficiency savings by 2008.

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