Sir Philip Green: Great Report – Wrong Conclusion

We don’t need a Ministry of Paper-Clips, Open Data is the Answer.

Sir Philip Green’s report on government spending  is now online.  Unlike most Government reports it’s a succinct thirty page slide deck in big print that can be read in five minutes.   If that’s too much then I’ll give you the gist:  he finds the government wastes money then concludes we must centralise buying.

I’ve no issue at all with his findings.  The examples he cites confirm everything we already suspected about wasteful and lazy Government procurement.  Some of the examples are jaw-dropping.  I’ve also no issue with his central theme that the Government has failed miserably to take advantage of its scale or credit rating.  On that he’s right.  He  obviously knows a trick or two about keeping hold of money so I feel a bit cheeky calling him out here –  but  I have to:  The findings might be good, the theme sound, but his conclusion is wrong.

It is nuts to propose that a problem of poor or lazy administration will be solved by more bureaucracy.   The Coalition Government is rightly extolling the virtues of localism at the core of its agenda.  There is an obvious intellectual contradiction between pushing localism and enforcing centralised procurement.  The last thing we need to do now is set up yet another Government Agency that would literally be the ‘Ministry for Paper-Clips’.  No matter how well intentioned it would fail.   I’ve spent long enough working with big business watching the pendulum swing back and forth from localised  business models to centralised models to know that the prize of lower procurement costs will come at the expense of agility and innovation.  It is in this agility and innovation that the very biggest prizes lie.

The diversity of Government activity is not comparable with running a chain of identical Top Shops.  If the proposal goes ahead you can imagine the scenario – a nimble cost-cutting  government department identifies a new way to deliver a service at a fraction of the cost of the existing way.  The project to implement it will need new kit.  Being new stuff, the central agency doesn’t have it on its catalogue – cue a tedious process to get into the approved kit list, another process to approve possible vendors, another process to then raise the purchase orders.  All these no doubt delayed because the new ministry is dealing with back-logs from every department and school and council and prison in the country for their regular stuff.  At the same time you would also be crushing the ability of SMEs to tender for government business as there is no way they would have the scale to operate at a whole government level rather than at a smaller niche.  Hurting that part of the British economy is not something we should be engineering.  Instead, we’re supposed to be marching into a brave new post-bureaucratic age and Green’s proposal runs counter to that end.

No, the answer to all the issues that Green has identified can be solved by removing the veil of bureaucracy  and accelerating proposals for complete transparency of  Government data on-line.   Every single contract and purchase order for more than £500 should be there for everyone to see.   It is our tax money so the spend data is our data.  Arguments by vendors about contract  ‘commercial sensitivity’ are a sham ,they don’t want it exposed they are ripping us off.  The public has a right to see that vendors are not charging the government more than they charge in the high street.  Overnight, by publishing all this data you would free-up departmental procurement officers to see what is the going-rate or a fair price.  More importantly you would allow commercial competitors to see the price they need to compete with. This more than anything  would continually drive prices downwards.  Rather than a procurement officer going to a vendor and saying “I need 10,000 of x what is our agreed price?”  You would have vendors ringing procurement officers and saying “I see you bought 10,000 x and paid y – in future I can do it z cheaper”.   You would stop at once the procurement officer who buys the slightly more expensive stuff because he gets more air miles or because the vendor sent him on a nice day-at-the-races during the bid.  The armchair auditors (or the press) would not allow it.  Transparency is to everyone’s advantage.  It will retain our localism agenda and leave space for agility and innovation in departments.  It will also mean we don’t need to waste time or money setting up a Ministry of Paper Clips.

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6 Comments

Filed under Economy, Politics, UK, UK Politics, Uncategorized

6 responses to “Sir Philip Green: Great Report – Wrong Conclusion

  1. Amy Cohen

    Interesting. I do like the idea of publishing everything – but am not sure I have your faith that people will have the patience or inclination to scrutinise it. The Green Report itself reads like a sixth formers homework by the way.

  2. Herring

    Tax Doger will certainly know how to save dosh. I’ll give him that. But he trades overpriced tat for a living so I wouldn’t want him near our hospitals.

  3. John Chaytor

    I agree with you 100%

    I said a similar thing at the time of the MPs’ expenses scandal.

    In that case, all that was required was for every CLAIM by an MP to be published along with how much was paid, and if any was refused, the reason.

    No MP would claim £1400 for a plasma TV or even 69p for a bath plug.

    What was the political response by Brown? Create a quango at a cost of £6m per year to oversee the expenses of 656 MPs. Madness.

    Openness is the answer.

  4. Spot on – Green has identified symptoms not causes. Taxpayers have rights to inspect contracts after the event under the Audit Commission Act, but only for a limited period of time. Suppliers should be told that all contracts, once the first invoice has been paid will be published in full online, so taxpayers don’t just see how much has been spent, but what on, so they can decide for themselves if they are getting good value. Every procurement opportunity at public bodies should be publicised, and the processes opened up as widely as possible and massively simplified and automated, so you avoid the situation where many contracts are only accessible to large organisations with vastly expensive public sector sales teams who can jump through all the ridiculous and expensive hoops put in place. This is usually done with the best intentions by public sector purchasers, but with the effect of excluding all but the most expensive organisations who can tick boxes designed to address concerns about ‘risk’or ‘equality’ or whatever else is deemed vital but that ultimately safeguards nothing. The bottom line is the state is rubbish at buying goods or services in a way that maximises taxpayer value – the people involved aren’t necessary lazy or incompetent, far from it, its just you get a different result when someone else is picking up the bill, and your biggest risk is not covering your backside. Genuine transparency could dramatically change this dynamic.

  5. Shakin Stevens Ghost

    “The Ministry of Paperclips”. Genius. It brings to mind images of Sir Humphrey and Jim Hacker. I’m going to use that one myself. You’re right on openess in governement – it woul’d make better, more effective government. Bring it on DC.

  6. Sarah Leyland

    Thanks for the link to the actual report. I do agree with you that centralized buying is not all it is cracked up to be. At my work we have to pay way over the odds through our central travel compared with what we can find on the internet. Yet the central travel still claims it saves a fortune as it reports to our board on savings against ‘book value’ which are fares no-one would ever really pay. The savings are an illlusion.

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