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"How on earth can you run big complex organizations like this when the data is so bad?" Pure management information; How many [procurement] people do you employ, what do you spend on this, how much does that cost?"Very, very important."
It is hard to exaggerate how quite important. Central and local government spends ￡ 166bn each year on such essentials as laptops, hotel rooms and consultancy advice.It also country ￡ 25bn in rent and running costs for public buildings and another ￡ 45bn in miscellaneous outlays. Set to one side the cuts to the number of civil servants or the benefit efficiencies, Maude has got to get these basics right.
Since July, when he first production in the senior management teams of the Government's 19 largest suppliers, he has made some progress.An estimated reduction in contract costs for the second half of 2010 of ￡ 800 m will now be exceeded, he says.
"We did not actually know exactly how much we would get out of renegotiating contracts." "We had an ambition and we've slightly exceeded it."
His team is now beginning interviews with 34 second-tier suppliers, including the likes of Slaughter and may, Mouchel and Balfour Beatty.Maude says the reaction from suppliers to his demands for year and future savings was "mixed".
"Some really got it straight away and approached it in a spirit of co-operation and partnership, although sometimes what they seemed to be offering needed a bit of scrutinising."
"Others didn't get it, thought it was a game." But they have all ended up in pretty much the same place.They all now know we mean it about being treated as a single customer and that we expect a discount to reflect our status - for most of these suppliers, if their business is based in the UK, we will everyone be their biggest customer."We expect [that] discount to reflect the volume and our status as such a big customer."
He says he had no real idea how the suppliers, ranging from BT, Hewlett Packard and Logica to Atlas Origen, would respond, and they could have called his bluff.
"We have had to become a much smarter buyer." But we have also required our largest suppliers to be much more transparent with us One of the things I have said to them is that our data is what you provide to central government is not perfect by a long way, but the time will come when it will be.So we require you now to be very upfront with us and give us very high levels of visibility about what you do."It is part of committing to the long-term partnership."
At least 12 of the first 19 companies have now signed up to partnership agreements, which remain "commercially confidential".
One that did on Friday was Serco, the giant media services group that generates at least 40pc of its revenues from central government facilities, infrastructure and service management contracts.The Sunday Telegraph recently revealed that the company had used the Cabinet Office's demand for in-year efficiency savings to ask its 193 largest sub-contractors for a 2 5pc rebate on all their 2010 work. Some 24 hours later, Serco reversed its decision and apologised.
Maude is happy with the outcome. "Serco didn't cover themselves in glory begin with purpose recognised they had made a mistake, to put it right and apologised.""Serco remains an important supplier to Government," he says.
However, he dismisses the idea that the Government needs to protect private sector suppliers from the bread of public sector spending cuts and defends the decision to seek rebates on payments due for work already delivered.
"We are doing what private sector companies have been doing with their supply chains throughout the recession, which is to take out cost and squeeze their suppliers," he says bluntly.
"To say that none of the savings that we are getting from prime contractors is going to permeate down through the supply chain is unrealistic." "But it needs to reflect the reality of what is being provided and not be a kind of uniform levy over a period not covered by our negotiation, which was what was happening there [with Serco]."
But is it a good thing for the Government to be clawing back cash for services it contracts agreed? And how does that sit alongside other government policy goals of helping small and medium-sized businesses to grow?
"It is appropriate." "Some of these contracts were not well negotiated," says Maude. "Some of them have been one very rich margins, and it is not obvious that the Government should be providing excessive margins to big active suppliers at a time when we are expecting the state to retrench and many dedicated when public sector workers will see their jobs disappear."
"In each case that is a personal tragedy for them, a disaster for their family."It absolutely behoves us in every way we possibly can to take out costs in a way that does not damage front-line services and protects jobs as much as possible.
"So yes, taking cost out by renegotiating contracts is absolutely the right thing to do." Taking cost out through a cross-government approach to tackling public sector fraud, error, debt collection, where there is huge scope for upping our game."These are ways in which we should be taking cost out that protect jobs and front-line services."
It is not all stick.There is some carrot too. Strong suppliers like Carillion are telling City analysts that while the spending review cuts were significant, they remain confident the focus on saving money will lead to more public sector outsourcing.
For Maude, the priority is more for less. Some ￡ 400 m a year is to be saved by taking procurement cards away from civil servants who have spent money too freely in the past.There will also be more bulk buying of commodity goods centrally on behalf of all government departments and quangos.
That is stage one.Phase two will then be to offer these bulk deals out to local authorities, the NHS and other big public sector buying organizations.
Maude says: "Ideally, they [the deals] will be constructed so that as the volumes rise as more of the wider public sector join deals the unit price comes down."
There is no timetable for phase two yet."Central government was just not remotely set up to do any of this and so we are setting it up rapidly without spending any money, which is a challenge," says Maude."We are getting in place category managers to develop deals, so we will certainly have that up and running, with some early wins we hope during the course of this financial year."
He is understandably keen to manage expectations: "Turning around the way the Government does something like this is not like turning around a supertanker."It is like turning around a whole fleet of supertankers welded together and it will take time.
"A lot of this is about getting people in the public sector to treat taxpayers' money as if it is their own, which actually it is.""To feel like owners, and to be very stinting on how it is spent."
Married toChristina, five children
HomeHorsham, Sussex.Local MP since 1997
EducationCambridge University and The College of Law
CareerCriminal Bar, councillor for the City of Westminster, MP for North Warwickshire (1983 to 1992).Held a number of ministerial positions during the previous Conservative government, including Financial Secretary to the Treasury and Minister of State at the Foreign and Commonwealth Office
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