Government departments and agencies need to innovate and save money by taking part in large-scale internet eAuctions, a minister has said.

Junior Treasury and procurement minister Angela Eagle said the public sector could save up to 50 per cent through the initiative compared to the price organisations might pay buying individually.

She was speaking after attending a live eAuction for IT hardware involving 24 public sector organisations which lasted three hours and saw suppliers undercut each other, saving an estimated £5.2m for the government.

Eagle said the need to get value for money under the current public service agreements and comprehensive spending review meant sensible procurement would be vital for departments.

“Innovation in the way government buys goods and services is key in securing value for money alongside world class service delivery,” Eagle said.

“I am calling upon all departments and agencies to look at how they might use eAuctions as part of their procurement strategy and how they can make even greater value for money savings by joining up with other organisations to buy collectively.”

Earlier this year, the public sector held its biggest ever eAuction involving seven government departments and agencies and the Metropolitan Police. Lasting 14 hours, the reverse auction saved £100m over the next three years – an average of 43 per cent off benchmarked prices.