Government is rubbish at buying stuff, says Green

Surprise, surprise: Sir Philip Green says he's already identified £6bn worth of procurement savings for the Government.

by Emma Haslett
Last Updated: 06 Nov 2012
Top Shop boss Sir Philip Green, the man (controversially) tasked with finding ways of helping the Government spend money more efficiently, reckons he's identified a whopping £6bn worth of savings. The crux of his review, which will be released today, is that the Government is failing to make the most of its size, buying power and credit rating - so it ends up spending way too much on everything from mobile phone contracts to office space. That's a 'staggering' amount of waste, as minister Francis Maude points out. And worse still, we doubt many people will be surprised...

Green - who was appointed by the PM to look at spending on stuff like IT, supplies and travel - says he's discovered some pretty impressive wastage. For example, different police forces are buying their uniforms separately – even though they’re the same uniforms, from the same suppliers. And apparently, the state has bought no fewer than 6m mobile phones, which equates to one for every single public sector worker in the country (it's even been issuing BlackBerrys to workers in junior positions who don’t actually need them). Office space is also a problem: the report shows that public bodies tend to waste about £10m a year paying rent on empty offices.

Green's appointment raised a few eyebrows, not least because of his tax affairs (most of his Arcadia Group is owned by his wife Tina, who's tax-resident in Monaco - the argument being that if she spent her whole time on Oxford Street, that would raise a few extra quid for the Exchequer straight off). But he knows about ailing organisations, having dragged the likes of Bhs back from the brink. And as someone who's known to negotiate hard and watch costs like a hawk - he once said he was ‘prepared to micro-manage stores down to the clothes hangers’ - he's surely got a thing or two to teach the Government about spending its money more wisely.

Francis Maude certainly seems convinced: 'His review shows that for far too long there has been no coherent strategy to make government operate more efficiently,' the Cabinet Office minister (who's leading the Government's cost-cutting efforts) said today. Green's basic view is that an organisation of that size and scale should be driving much harder bargains and acting with a much greater degree of co-ordination - just as it would in the private sector. 'There is no reason why government should not be as efficient as any good business,' he said today.

Ultimately, there are all sorts of ways in which government is very different from business - as MT explores in our feature this month (which you can read online here). Equally, in the longer term, the big-money savings will only come from re-engineering the way that state delivers its services. But if this report is anything to go by - and it will certainly ring true for many people - Government procurement is a chaotic and inefficient mess. £6bn worth of penny-pinching is a very good start.

Find this article useful?

Get more great articles like this in your inbox every lunchtime