Smaller agencies will need to take a collaborative approach to winning business due to impending public sector cuts, according to Stephen Moir, corporate director for people, policy and law at Cambridgeshire County Council and Public Sector People Managers’ Association (PPMA) Treasurer.

This week Arcadia supremo Sir Phillip Green described government waste as “shocking”, claiming that the government could cuts its procurement and property budgets by 5-10%.

Moir told Recruiter: “With the competition within the market, as the client puts more of a squeeze on the marketplace, those that have the have the larger scale operations will be able to better respond to that and have the internal management systems and loss leading systems.

“For smaller agencies on framework agreements, I think it’s going to be extremely tough. There will be greater competition in the market which will drive improved pricing and improved service. It may price some smaller agencies out.

 “As a client, I want maximum value for money and maximum quality. Collaborative bids in terms of smaller agencies is happening in a lot of cases. I think of a national framework where a big agency collaborated with a niche agency with IT expertise. The big agency had the expertise in management and economies of scale and the IT agency brought the expertise of sourcing IT professionals.

“There is going to have to be an increase in collaborative arrangements. If you are supplying to the public sector, the smaller agencies will have to partner up with somebody, whether that means a formal merger, whether they are bought out or a partnership arrangement.”