Maude attacks 'staggering waste'

Discussion in 'The Intelligence Cell' started by cupoftea, Oct 11, 2010.

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  1. Copied from the Financial Times in toto for those who can't be arsed to register.

    By Nicholas Timmins, Public Policy Editor
    Published: October 11 2010 21:40 | Last updated: October 11 2010 21:40

    Ministers should leverage the government’s buying power and require departments to use centrally negotiated contracts for energy, IT, travel, accommodation and other basic commodities, Sir Philip Green, the government’s efficiency adviser, has recommended.

    Every transaction, including those below £1,000, should be specifically authorised. And all existing contracts with more than £100m still to go should be audited to extract better value from them.

    In a report that Francis Maude, Cabinet Office minister, said revealed “staggering” waste, Sir Philip said departments were paying as much as £73 for a box of paper, or as little as £8.

    Mr Maude added: “His review shows that for too long there has been no coherent strategy to make government operate more efficiently.”

    The highest price paid for a printer cartridge is £398 against £86 for the cheapest, while the highest and lowest price for laptops ranged from £353 to £2,000 when the equivalent high-end computer could have been bought for £800.

    The government might save up to 40 per cent or £800m on its fixed-line telecoms costs – roughly estimated at £2bn – if a central contract was used. Further savings could be made on its £21m mobile phone bill. Some £50m could be saved by requiring use of video conferencing rather than bringing staff to London.

    IT contracts are inflexible and poorly negotiated. One pays a contractor for hardware provision and software development at a rate of £1,000 per person per day on a £100m-a-year contract – when most of the work is subcontracted to another supplier. And property management is “wholly inefficient”. One agency signed a 20-year rental lease at £1.2m a year with no break clause for 15 years – with the government abolishing the body nine months later producing an unnecessary rent commitment of £18m.

    Sir Philip’s key recommendation is that there must be “a mandate for central procurement” and a big improvement in the quality of procurement data, which are both “shocking ... inconsistent ... and hard to get at”. That criticism has been repeatedly made by businessmen who have reviewed government procurement. The government should also use its credit rating to secure better prices. It is virtually guaranteed to pay up once it has signed a contract, so suppliers should be able to borrow cheaply.

    Sir Philip said his paper “gives a fair reflection of the inefficiency and waste of government spending which is due mainly to very poor data and processes”.

    Budgets need to be built bottom up. Procurement and property management should be centralised, while poor data must be improved.

    Sir Philip said government procurement cards, introduced to make small purchases easier, now operated on such a scale they were not properly monitored. There are 140,000 payment cards in circulation, on which about £1bn a year is spent but not monitored.
  2. And meanwhile in an NHS PFI building near me a two plug socket costs £2000 to have fitted as it requires admin costs, fitting and lifetime costs over the 20 years. A hot water boiler? £6000.
  3. Sir Philip seems to have stumbled on an embarrassing truth. A government needs more central planning and a central purchasing organisation dedicated to finding the best value for government departments.

    How this fits in with a government allegedly dedicated to decentralisation, no top down direction and local control is anybody's guess.

    Maybe a new Quango could do the job nicely.
  4. Im not sure a Labour throwback would help the issue much- I seem to remember an appalling document on the amount of quangos, spending etc. Rather shocking stuff.
  5. Having left MoD in 2003, and worked in a number of local/central gunmint organisations since, I dunno why anyone would be surprised by this.

    Even things like A4 printer paper are cheaper off the shelf of the local TESCO, than they are via the existing 'centrally negotiated' contracts that have been commonplace for years in gunmint.

    It is insane - and has been since before Thatcher.

    It will take some serious arrse-kicking to make it change.
  6. Civil servants don't care - it's OPM*

    *Other People's Money
  7. Not really JC, although I am not a civil serpant, I work for the British Army and am well aware that all the costs eventually come out of my pocket as I am a tax payer.
  8. ashie's response is typical, theres no problem wasting taxpayers hard earned, carry on as you are. At least the new Governement is looking for the wastage along with its programme of potential cuts, whereas Red Ed et al would continue to spend like they were before the election.
  9. Yes, my department pays £340 for a printer cartridge we can buy for £115 from a discounter.
    The wonders of buying through Lyricon
  10. Yes we bloody do!

    When I used to be able to buy the stuff direct, I used to get the cheapest quotes then play them off against each other and drive the costs down even more. I expected and got 10% of retail even before I'd start talking.

    Now? Boils my piss to see stuff I was getting at near as damn it trade prices now being bought for us at twice retail.
  11. Not just the public sector...! I work for a large multi-national. Recently I ordered 5 mobile phones for staff. The preferred (read: only) available phones were a Nokia and a Sony Ericcson. The Sonys offered more of what we needed. I could have dropped in at the local Vodafone store (our providor) and bought the phones for £80 each. My cost through the company is £129. SIM cards and insurance are provided seperately, so we are comparing apples with apples. No-one in the purchasing chain can offer me an explanation.

    FORMER_FYRDMAN LE Book Reviewer

    Ah, let me help you here Ashie - he's talking about business-style central purchasing run by accountable professionals faced with the possibility of a P45 if there's a c0ck up, not the hopeless collection of passive-aggressive incompetents that you're familiar with.
  13. I love the way when his report cam out they interviewed a minister on radio 4 (name I forget) who basically said you have to remember he only ran Top Shop he doesn't really understand about Centralising Government and reducing costs.... PMSL while I was driving!
  14. Auld-Yin

    Auld-Yin LE Book Reviewer Kit Reviewer Reviews Editor

    Just before I retired, I worked for NHS Scotland. I had to arrange travel and accommodation within Scotland for some people and found that I could make the arrangements for half the cost of the national contract, a saving of hundreds of spondoolicks. I was not allowed to make my own arrangements and had to use the national contract. I was told by one of the senior procurement managers that the contract had been designed to enable savings for Western Isles Health Board as they had a lot of travel and accommodation. So to enable savings for one HB, every other Board in Scotland had to pay through the nose!!! When I suggested a national contract with a separate one for WI Health Board I was told that that was 'not possible'.

    Procurement - not about saving money!!
  15. Sympathetic_Reaction

    Sympathetic_Reaction LE Book Reviewer

    As others have said, it isn't just government that have this problem. I worked for a large british defence company (go on have a guess) and we had to buy all office supplied through a centralised system. Printer cartridges were £250 a pop, 4 per machine, £1000 per machine every month or so. Our machine stopped working because one of the feed items ran out of life (something like 100,000 sheets) and so a new one was ordered....£500 and a 2 week wait time. So I went online found the same item from a reputable company at £300 and ordered it through our stores system. Arrived the next day and was fitted, the other item turned up 4 weeks later and was stuck in the back room as a spare.

    2 days after I'd ordered it I got a b*ll*cking for bypassing the system and saving the company money. Considering it was the only printer in the office they were expecting us to be without a printer for 2 weeks (or 4 in reallity) because it 'was the system'.

    I reckoned the site could save about £100,000 a year on printer toner if they bought via the internet (branded items not cheapy ones) rather than the contracted system....but that wasn't 'efficient'.