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Sir Philip Green uncovers 'staggering' government waste 
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Sir Philip Green uncovers 'staggering' government spending waste

http://www.mirror.co.uk/news/top-storie ... -22627329/

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Billionaire Sir Philip Green came out punching yesterday as he uncovered hundreds of millions of pounds in wasted government spending.

The heavyweight Topshop tycoon said he had found a "staggering" amount of cash was being squandered after a look at £191billion of accounts. And he said by renegotiating contracts with mobile phone companies, stationers - and even coffee suppliers - he saw savings of up to 40%.

"There is no reason why the government should not be as efficient as any good business," he said.

But in an interview in his offices off London's Oxford Street beneath a portrait of Gordon "greed is good" Gekko, he angrily rejected accusations that his report was a charter to cut jobs.

"It doesn't mention the word job in 34 pages," he stormed. "This has got nothing to do with firing people! Zero! Nought! I have never heard of anything like this in my life. Your views are quite weird."

When it was suggested driving down cost for government suppliers will lead to small businesses losing cash and shedding jobs, he said: "I'm sorry, you must be drunk." Pointing to a printer cartridge made by Hewlett Packard - which laid off 1,300 people yesterday - he added: "I could buy 10 of this item for £85 or I could spend £3,900. And you say paying £3,900 keeps more people employed."

Sir Philip, 58, stoutly defended his findings, revealing taxpayers forked out for 400,000 hotel nights in London last year, costing £38million.

The prices of rooms ranged from £77 to £117.

"Have they not heard of video conferencing? It is unacceptable," he said.

He highlighted details of uncoordinated spending, with departments paying wildly different amounts for the same services.

One department coughed up £1.31 a leaflet, compared with a market price of 26p.

And departments were paying anything between £8 and £73 for a box of paper and between £86 and £396 for printer cartridges.

The report also revealed the price of a cup of coffee ranged from £1.45 to 90p. Sir Philip added that it had been tough to get basic information out of the government about its spending.

He was first told that transport costs were £2billion. A second estimate was £500million and the third estimate was £768million. The actual figure was £551million.

Sir Philip says the £25billion property bill could be reduced.

One government agency recently located to the Midlands after signing a 20-year lease - with no break for 15 years - with a rent bill of £1.2million a year.

That agency has been abolished, leaving a rental commitment of £18million. Another area for savings is telecoms, which costs the government £2billion a year. Sir Philip says this could be 40% cheaper.

The annual cost of 105,000 mobile phones, mostly with one provider, was £21million. Sir Philip said it was "inefficient".

The prices paid for government laptops varied from £353 to £2,000. And Sir Philip said one of his team found the same laptops online for £800. But when the Mirror pressed Sir Philip on the economic fallout from his review, he said: "It's nice meeting you. I have had a long day.

"I can't be having this sort of conversation. I have never heard anything so bizarre in all my life."

Amid the leather and chrome furniture of his swanky office, Sir Philip wears enough bling to rival a New York gangster and his heavy watch worth thousands smashes down on his walnut desk as he makes his point.

You think either the thick desk or the designer Bulgari watch is going to break - and the smart money is on the desk. His shirt sleeves are held together by solid silver cufflinks and you can't help thinking that this really is a long way from the Topshop floor.

Shadow Treasury chief secretary Angela Eagle has questioned Sir Philip's appointment.

She said: "His own tax arrangements include paying a £1.2billion dividend to his wife, who just happens to be domiciled in Monaco for tax purposes. While this isn't illegal, the Business Secretary has gone on record saying he is unhappy about it and the Energy Secretary has said that it sends the wrong message."

But Sir Philip dismissed the charges that his complicated personal tax situation made him ill-suited for the job.

"I do pay British tax. My family do," he said. "I was asked to do a job by the Prime Minister. I have done a job.

"It is non-political as far as I am concerned. You are the only paper who have turned up here and want to be hostile."

Sir Philip, owner of the Arcadia Group whose assets include BHS and Dorothy Perkins, said his report was entirely apolitical.

"This has got nothing to do with red, blue or yellow," he said. "This has got nothing to do with politics for Philip Green."

The fact that they must have incompetent civil servants running procurement means that they could save even more by firing a lot of them and hiring people for their ability to purchase.

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Tue Oct 12, 2010 6:51 pm
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Yeah, I heard them on radio 5 almost demanding that we centralise government purchasing, to save money.

This is a joke.

My experience of a central procurement dept leaves a lot to be desired. They focus on negotiating national supply agreements with large companies, tying all and sundry to a very specific list of suppliers, under the belief that they will save money

What usually happens is that an individual business unit will already have a local supplier, that they can no longer use, who is actually cheaper and can provide a quicker service than these large companies. But because they are a small independent company, with maybe only a couple of fairly localised branches, they will not be considered as an approved supplier.

Central procurement sounds great in theory, but rarely delivers the savings you would imagine.

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Wed Oct 13, 2010 7:38 am
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For a lot of our day to day stuff here (pens, staples, printer paper etc), I know for a fact that we'd be better off walking into a medium sized Tesco than we are buying in bulk from our current supplier - I can only imagine what it's like in a government department :shock:

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Wed Oct 13, 2010 9:22 am
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If (and its a big IF and as its government its probably very unlikely) its done correctly then they could save money

Basically large items that dept need should do done centrally
e.g. Comms infrastructure or Travel

Low value items (stationary etc)
An account at a couple of major suppliers should be set up with instruction to use them unless you can show it would be cheaper to use someone else

I used to work for a big bank and we did a deal with an airline – all flights would be via that airline (where they had routes) and we a guaranteed minimum number of flights. In return we got substantial discounts.

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Wed Oct 13, 2010 10:22 am
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If Thatcher hadn't corrupted the government's proper auditing authority in order to get approval for Al-Yamamah (the amazingly corrupt arms sale she closed for BAE with the Saudis in the 1980s), we wouldn't need rent-a-tycoons to go over the government books for us, we'd have competent and trustworthy civil servants for that.


If they are paying 2K for an £800 laptop, it's probably part of an outsourcing contract where the price of the laptop includes full delivery and configuration service, 10% stock holding for immediate swap outs, and likely some kind of dumb financing where this year's laptops are rolled into next year's budget. Ordering that online for £800 will just leave you with a confused staffer whose shiny new laptop can't access the domain.


Wed Oct 13, 2010 10:31 am
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Spreadie wrote:
Yeah, I heard them on radio 5 almost demanding that we centralise government purchasing, to save money.

This is a joke.

My experience of a central procurement dept leaves a lot to be desired. They focus on negotiating national supply agreements with large companies, tying all and sundry to a very specific list of suppliers, under the belief that they will save money

What usually happens is that an individual business unit will already have a local supplier, that they can no longer use, who is actually cheaper and can provide a quicker service than these large companies. But because they are a small independent company, with maybe only a couple of fairly localised branches, they will not be considered as an approved supplier.

Central procurement sounds great in theory, but rarely delivers the savings you would imagine.

It also does not compare well to an organisation like BHS. That will have centralised purchasing for many things and it will also benefit from having an internal delivery system to get those items to the stores as easily and cheaply as possible. For the government they do not have the infrastructure to do that. Local buying can be best for some items and for others national buying might be better. Police cars could be bought centrally, stationary locally or at a regional level.

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Wed Oct 13, 2010 8:13 pm
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