I read about Sir Philip Green’s Efficiency Review with great interest – although the wasteful procurement practices in Central Government made for grim reading.
Sir Philip’s key findings included:
• Identical goods being purchased from the same supplier – but at different prices
• A lack of control and accountability over large budgets
I support the findings. But I would, however, make two points that I feel are important if the report is to have a tangible impact.
Firstly, the Government must move quickly to set out the next steps: highlighting inefficiency is one thing, doing something about it is another. The report has given the issue momentum and there is now a once-in-a-generation opportunity to make a real change to the way that Central Government procurement is conducted.
The second is that giving Central Government the tools to self-heal is not enough – there must be a change in culture before anything else can happen. Sir Philip highlights a culture of “no motivation to save money or to treat money as your own”. This can be overcome to some extent by using the right tools, but the mindset must change as well.
My experience of working with Local Government is that changing culturally deep-rooted processes and introducing tight control through the deployment of technology is the way forward.
Only then can organisations centralise procurement for commodity goods, enforce the necessary controls to ensure compliance and achieve huge financial savings.
Collaboration can play an important role too. Organisations – such as councils – that share services can achieve economies of scale and buying power that are normally only available to much larger enterprises. And this has happened across regions of the UK for EGS’s customers.
If Sir Philip’s report describes the ‘before’ state of affairs for Central Government, I would offer some of England’s County Councils as what the ‘after’ picture may look like.
Sir Philip states that: “the prize for the tax-payer is too huge not to chase”. I welcome this message and encourage the Government to look no further than Local Government to see a clear example of what can be achieved by embracing a centralised approach and procurement technology to introduce efficiency and control.
