30 March 2006 | Rebecca Ellinor

Public sector procurement could save an additional £31 million a year on postal services by 2008-09 if it took some straightforward measures".

That was the conclusion of a National Audit Office report, Improving the efficiency of postal services procurement in the public sector, published last week.

While significant improvements had been made, there is scope to do more, it concluded.

The public sector spends almost £650 million a year on post and, at 28p an item, the average cost is a quarter higher than that paid by the financial services sector.

Of the £31 million extra savings, £9 million could result from customers sorting mail by geographic area before giving it to suppliers, and another £9 million by using second-class post more frequently. An additional £8.5 million could result from increased use of competitive tendering and a further £4.5 million by reducing the amount of undeliverable mail.

Sir John Bourn, head of the spending watchdog, said: "There is no reason why the public sector cannot achieve the £31 million annual savings and aspire to cost levels closer to those enjoyed by the best of the private sector."

The NAO has produced a guide to help public sector organisations (www.nao.org.uk) and OGCbuying.solutions is setting up framework agreements.

SMmar2006