Massive government savings in goods and services contracts would be boosted by less public procurement red tape from Brussels, Cabinet Office Minister Francis Maude has said.
After talks in Brussels with EU single market Commissioner Michel Barnier, he said the UK was already slashing costs by streamlining purchasing policy and cutting out duplication and overlap.
Savings up to the end of the financial year last March amounted to £800 million a year, he said, and the Government was continuing its war against "chaotic" purchasing practices by renegotiating its bulk contracts and increasing value for money for taxpayers.
Much of it was down to the Government to become more efficient, swifter, and less bureaucratic in agreeing and managing contracts. But the European Commission could help with revised EU public procurement rules expected to be proposed next month.
Mr Maude said that in the current economic climate, governments had to be more selective and cost-conscious - cutting out entirely their "nice-to-have" purchases when updating equipment and services, and even struggling to afford the "must-haves".
Before travelling to Brussels for talks at the Commission and with MEPs, Mr Maude told a supplier conference in the UK that the way successive governments have conducted business had "militated against UK interests and against growth and jobs in this country".
The UK awarded 3% of public procurement by value to foreign suppliers, compared to 1.9% in Germany and 1.5% in France: "The difference is the governments of these countries work closely with their domestic firms so they are geared up to win contracts at home and abroad. Whereas in Britain, by over-interpreting EU law and over-reacting to fears of bias in favour of British suppliers, we take an almost deliberately short-sighted approach to working with business."
Mr Maude said the Government would not show favouritism in future but wanted public procurement rules which did not price smaller firms out of tendering procedures.
At the moment public procurement procedures were faster and much cheaper on the continent - with suppliers typically facing costs four times as high in the UK as in France to complete the necessary tendering requirements.
The hope is that updated EU rules will reinforce UK government determination to reduce costs and cut time-scales - including a 40% reduction in the completion of the vast majority of procurement deals to within 120 working days.