By politics.co.uk staff
Improving the way the government purchases its stationery and office services has already saved £1 billion, Francis Maude has announced.
Savings inspired by retail tycoon Sir Philip King, whose review last October concluded the government could benefit more from economies of scale, have already secured £1 billion of savings.
A further £3 billion is set to be achieved every year, a 25% cut in the government's current annual spending on common goods and services.
"It is bonkers for different parts of government to be paying vastly different prices for exactly the same goods," he said.
"We are putting a stop to this madness which has been presided over for too long. Until recently, there wasn't even any proper central data on procurement spending."
A central team, Government Procurement, has been established to place contracts across the whole of Whitehall.
It will end the practise of different departments paying different amounts for the same item. Between £85 and £240 was paid for the same printer cartridge from the same supplier by different departments and agencies, for example.
A plan has also been published outlining how the government plans to do 25% of its business with small and medium sized enterprises.
"We are determined to press ahead with measures to create a more level playing field so that small organisations and businesses can compete fairly with bigger companies for government contracts," Mr Maude added.
"SMEs can provide better value and more innovative solutions for government and the actions set out today will support their growth as the economy starts to recover."