Procserve was set up six years ago to act as an electronic marketplace for public sector buyers and private sector suppliers to meet and make transactions. Since then it has built up a network of over 20,000 suppliers and 6,000 buyers across most sectors of government.

Clifford said that a key reason that transactions have increased on Procserve is that procurement is now high up on the list of government's priorities.

"I think the proper procurement of goods and services is on the strategic agenda. That's clearly a good trend for us. People are thinking where can I get management information that tells me how much I am spending and about compliance with deals and contractors," he said.

"There is now a view that procurement is important and can lead to less painful ways of achieving cost reductions. Look at the Department for Work and Pensions as an example. It is using our electronic tools to run mini competitions to find training courses for the long-term unemployed."

He added: "Previously that would have been a yellow pages activity, which would have required a period to search, a period to email, a period to get responses, a period to get prices and a period to actually book the training. Now we are seeing that done in a cycle time of six days."