Government wastes billions of pounds, says Green review

11 Oct 10
Sir Philip Green today gave a damning verdict on government spending, as his Whitehall efficiency review uncovered billions of pounds of waste
By Lucy Phillips

11 October 2010

Sir Philip Green today gave a damning verdict on government spending, as his Whitehall efficiency review uncovered billions of pounds of waste.

Prime Minister David Cameron asked the retail tycoon to conduct the review of commodity procurement, property and major contracts in August.

The findings, published today, reveal that the government is failing to reap massive savings from fully using its buying power. There is no centralised approach to procurement, leading to departments paying hugely different prices for the same items. The government was also failing to use its good credit rating to buy efficiently.

Green also judged that procurement data held by government was extremely poor, while spending processes currently in place made it ‘impossible to operate efficiently’. 

He said: ‘There is no reason why government should not be as efficient as any good business... The conclusion of this review is clear – credit rating and scale in virtually every department has not been used to make government spending efficient.’

Francis Maude, Cabinet Office minister and chair of the government’s efficiency and reform group, responded: ‘The scale of the waste uncovered by Sir Philip and his team is staggering.

‘We know that government is very different to business. But that does not mean that it should not act in a more business-like manner. Every pound that we can take out of the cost of government is a pound we can protect on the front line.’

The review also shows that multiple contracts have been signed with major suppliers by different departments at different prices.   

It says Whitehall’s annual £2bn telecommunications bill could be slashed by 30%-40% if government acted as one buyer and used only one supplier. At the same time, expensive IT services are contracted for too long and with no flexibility, Green says.

Although the government is the largest property occupier in the country, its use and management of its space is ‘wholly inefficient’.

Green makes a series of practical recommendations. They include: mandating the use of video conferencing; creating a standard policy for vehicle hire to slash travel expenses; and curbing the use of payment cards that allow spending of up to £1,000 a month without authorisation.

He also calls for departments’ budgeting to be standardised and incentives for them to spend less money than allotted.   

Government spending totalled £670bn in 2009/10.

Did you enjoy this article?

AddToAny

Top