Philip Green discovers ugly truth of government incompetence

Any bets...

That the people who will be screwed will be the small suppliers, who will find they are supposed to fund the government debt by having the sort of payment terms supermarkets / chain stores like to insist on and those towards the lower end of the value chain e.g. cleaning / catering companies who can grind down their staff a little more, whilst the big IT / management consultancies will continue to get their large fees (because if there is one thing we know, it is that big changes mean expensive 'change management consultants' etc. etc.)

Fancy paper?

I'd love to see what paper costs over £70 per box.

As I've said...

on various newspaper article comments sections, why cut child benefit when you can save more through efficiency? The best analogy is the water utility company's who extol us to save water, not have so many baths, impose hosepipe bans and so on whilst their system loses a fifth of the supply every day through leaks.

Do we care

that private sector companies are ripping off these govt departments or is that just sensible business practice?

Anyway good news that this is being exposed even if there won't be the punitive repercussions that might be fun.

Some things seem a little silly though, of course the cost of laptops, paper and cartridges vary - there's all sorts of different types - I would expect to see similar variations in the cost of fruit so it would be useful to have a breakdown by type.

it's called privatisation

More here: http://www.guardian.co.uk/business/2010/oct/12/greens-centralised-procurement-old-ideas

The tories wanted to give their pals some momey, now they want to take it away?

Some of the savings may not be so simple

I know the £2000 laptop price looks ridiculous but what spec are they:

If it's a laptop with a Flagstone drive installed then the machine will be bloody expensive, more so if there are any hardware keys required for the device.

Not quite so simple, same for the printer paper as you can't get your 'secure paper' in the local office supplies store.

Mind you such exceptions will not be that common in the overpriced government departments.

....and in another 5 years

someone else will be reporting that the "Department for Administrative Affairs" are wasting millions on centrally managed procurement and it would be much cheaper if individual departments were allowed to buy things themselves and cut out a lot of the bureaucracy!

"Is the minister aware that a pen can be bought for 50% less if civil servants were simply allowed to buy them in a high street shop?".

Can you tell I'm re-watching "Yes Minister"?

Centralisation does not necessarily deliver savings

Centralisation does not necessarily deliver savings. There is a fine line here.

A laptop build to be used by 20000 people in different job roles with different needs has a testing and integration bill that eats all savings from having up to 20 different systems with around 1000 users for each one.

This one is usually not factored in and in fact is usually counted from a completely different budget.

By the way, private corporations are not any better than the government here if not even worse.

Having read the report...

...it seemed that the biggest savings would be in getting someone who actually knew what they were doing to sort out office accommodation. Apparently the silly buggers often don't negotiate break clauses in their leases so, as in one example, an agency leased an office at £1.2M/year on a 15 year lease with no break clause and were abolished a few months later. £18M down the toilet.

The report also points out that they don't actually know what they're spending half the time - example they were initially told central government spend £2 billion on travel. It was actually £551 million. At least it was in the right direction ;-)

ps - Apparently the guy who did a similar report for Labour 8 or 9 years ago goes along with most of the recommendations.

What's the saving on paper then, Phil?

Unintended adverse PR from this report is that it was a Conservative Government that rejected Gershon's recommendation to develop Centralised Procurement.

Easy headlines here for Mr Green but not very much information - perhaps because, as he said, the data proved to be difficult to work with.

"...printing paper varies from £8 to £73 per box, ..."

I'm quite willing to believe that the cost of paper does vary within those limits but are we comparing apples with apples - what is the weighted price actually paid for a ream of A4, 80 gsm white paper? Knowing the range tells us nothing, it doesn't even tell us what the cost saving opportunity is. In contrast, his musings on the property portfoltio look much more interesting even if it takes time to unwind from the current holdings.

BTW since the MPs in the HoP are public employees when are we going to see their proposals for cutting their costs by 25%?

@hohoho

Dead right. Privatisation is the biggest lie ever perpetrated by any government ever.

Do we get better service? Perhaps, because a business intent on making money can't be stuffed full of dead wood and timeservers. But is there any reason a government couldn't require the normally-expected standards of work from its employees, and back that up with firings (after the mandatory numbers of warnings, etc., of course)? Absolutely not.

Instead we end up paying what we'd have paid anyway under a government-run service, *plus* a nice fat wodge to the shareholders. Shareholders would mostly be extremely unhappy with less than a 5% return on investment, so that means we're all paying 5% more for our services. Deep f**king joy.

misinformation

Having worked closely with numerous government and major business IT departments and IS finance groups, I can tell you this information is completely out of context, and flatly misleading.

A company may pay $20 for a box of paper. Added to that is shipping, storage, and internal labor in the inventory and facilities groups. A Department needing that box of paper can't pay $20 for it, they have to cover the cost of the guy who goes and gets it, another guy who brings it over to their area, the costs of someone processing the paperwork to make that happen, and the costs of someone monitoring inventory (and the inventory management and asset tracking system) so that more $20 boxes of paper are appropriately ordered so as not to go out of stock. $50 for a box of paper is completely reasonable.

Even for a small office, if you're sending an office clerk over to Office Depot to buy a $20 box of paper, are you costing out just $20? No, you should be costing out their labor (and overhead) costs for the time it took, their expense report for the use of their car, charges associated with processing the corporate card payment (or employee reimbursement in payroll), and the cost of that paper (plus taxes). If it takes 60 minutes to get the job done, and they make $10 per hour, that $20 box of paper might have cost $40-50 easy once all the soft costs are factored.

In large firms, everything is charged somewhere. Overhead however is not charged as a line item, it's bundled into internal costs. When we internally sell a SQL server cluster to a department for use, we don't charge them just for the hardware and license, which might be $30K, we charge them for deployment, remediation, maintenance, monitoring, 3 years warranty, overhead and oversight of the teams deploying it, backup tape costs, SAN configuration, network configuration, switch port costs, and 3 years of electric and cooling costs, plus some for the facilities (rack space). Line items on our invoice might be $40K for the servers and licensing, but we charge somewhere between $90 and 150K for that sql cluster costed over 3-5 years depending on complexity, SLAs, and RTO/RPO/DR/BC needs.

We don't back-bill for monthly running costs, they're estimated. Line items for overhead and facilities have to be added in. One agency may also acquire good from an entire other division because they might not even have their own dedicated budgets, and that can add additional costs.