Archive: March, 2012

Is George Osborne’s third budget good for procurement?

Consumer confidence has not responded well to the budget. Which?, the consumer champion conducted a poll asking the public whether they would be better off after this budget. One in three people said they would find it more difficult to pay for day-to-day essentials following the budget. 64 per cent of people said their confidence in the economy is unchanged or worsened. This news will not encourage suppliers that are thinking of investing in new and improved products and is not dramatic enough to lead to heavy price discounting.

The decision not to further defer the planned increase to fuel duty will add to many businesses’ pain. Buyers can expect to see requests for price increases as suppliers with high transport costs seek to pass on the increase.

On a more positive note, the Chancellor wants to put private capital at the heart of the big infrastructure projects. This should benefit the economy although it won’t be felt for a long time and buyers are unlikely to feel any effect. On the other hand, the cut in corporation tax from 26% to 24% next month will have an immediate impact as companies consider investing more in the UK.

Overall, I’m pleased to see that the Chancellor has resisted calls to spend money he didn’t have and has stuck to his guns and delivered a fiscally neutral budget. In general, I think it is a good budget for procurement. Unfortunately, this is no time to celebrate as excise duties on alcohol increase by 2% beyond the rate of inflation.