Philip Green report on Gov waste - structural change needed

The Minister for the Cabinet Office, Francis Maude, says that the scale of waste uncovered by Sir Philip Green in his report is “staggering”. This is a bit of posturing, though. Even before Green’s report was commissioned...

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The Minister for the Cabinet Office, Francis Maude, says that the scale of waste uncovered by Sir Philip Green in his report is “staggering”. 

This is a bit of posturing, though. Even before Green’s report was commissioned Maude knew how bad things were. He was told by Nigel Smith, the outgoing Chief Executive of the Office of Government Commerce which is part of the Cabinet Office.  

Smith went public with his concerns at the Smartgov conference on 15 June 2010 when he said that there are 44,000 buying organisations in the public sector which buy “roughly the same things, or similar things, in basic commodity categories” such as IT and office supplies.

Up to £220bn a year - nearly a third of everything government spends - is on procurement. 

Smith said there was “massive duplication, tendering costs on suppliers, and a loss of value due to true aggregation and spend commitment.”

He added: “Visibility of government-aggregated requirements of demand is poor, with suppliers having little forward look of opportunity to tender and offer innovative solutions for required outcomes.

“Contract management with supplier relationship management is inconsistent, with too little attention paid to continuous improvement and benefits capture within contract.

“The opportunity to improve outcomes and efficiency gains should not be constrained
by contract terms and innovations should not stop at the point of contract signature."

I asked Smith at the time what could be done if permanent secretaries were reluctant to see their empires shrink too much. Would mandating change force them to shrink and eliminate inefficiencies?

He replied that the best time to have business change is when you have serious difficulties.

You have the ministerial will to do it? I asked.

“Absolute ministerial backing to do it. If we miss this opportunity we need shooting.”

My full interview with Nigel Smith and government CIOs, including the overall government CIO John Suffolk, is in a paper on tackling waste I wrote for software company Erudine.  

The paper highlights the gap in control between the Cabinet Office - which has known about the extent of inefficiencies for years - and the departmental heads. The paper asks whether the Cabinet Office can force Sir Humphrey to act, through mandating structural change.

Sir Philip’s report, which is due to be published later today, is unlikely to say much that's new. But it may strengthen the will to the Cabinet Office to force through change. 

The warning from history, though, is not to introduce changes that the big suppliers have been lobbying for: that would risk a new series of government IT disasters. 

The answer surely is to keep it simple: simplify and standardise business processes - then support them with simplified standardised IT.  

As an example of what can be saved, Chris Chant, the former CIO at DEFRA and now
CIO at the Olympic Executive, has said it will be possible to use open-source office
software and buy laptops for widespread departmental use at about £200 each.

In the past Gartner has put the benchmark figure for a networked departmental
desktop at £2,500. If millions of civil and public servants used £200 laptops, those
savings alone would run into hundreds of millions of pounds a year.

**

In the Yes Minister programme "Doing the Honours", the minister Hacker suggests withholding honours from heads of department unless they make efficiency savings. [Knighthoods are usually given automatically to, for example, chief executives at the Department of Health.] 

Hacker: I'm not going to approve any honour to any civil servant in this department who hasn't earned it.

Sir Humphrey: What do you mean 'earned it'?
 
Hacker: I mean "earned it". Done something to deserve it.
 
Sir Humphrey: [indignantly] But that's unheard of.

Link:

Time to be brave minister - my paper on tackling waste

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