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GREEN AND BROWNE

Two major events this week, namely Philip Green’s review of government spending and Lord Browne’s long awaited review of university fees.

With regard to Lord Browne’s review, which has been heavily trailed in the press, the former BP chief executive is expected to propose a lift in the cap on tuition fees to around £7,000 a year, with the possibility of some universities charging more for certain courses.

This of course, only applies to England, as higher education is a devolved issue and the question for Leighton Andrews, the Minister for Education, is whether Wales will also adopt the recommendations or whether he will take a very different view of how to fund the university sector in Wales.

I am sure some in Wales will try and make political capital out of this but it is worth noting that the Browne Review was set up initially by the last Labour Government so it can hardly be called a Tory plot to increase tuition fees. One can only hope that we can have a mature debate on this issue as there is a real need to close the gap in funding between Welsh and English universities.

With regard to the review of government procurement by Sir Philip Green, the owner of Topshop and BHS, initial reports suggest that the government may be able to cut swathes of waste from public services and that financial controls across Whitehall are "lamentably bad". Indeed, it is probably no coincidence that this report is coming out a week before the Comprehensive Spending Review.

It is expected that Sir Philip’s findings will show that hundreds of millions of pounds have been wasted on unnecessary rents and sloppy purchasing across Whitehall, with different departments failing to come together to push down prices on a range of products by buying in bulk.

It will also show that Government Departments often have no idea what they are spending taxpayers' money on. For example, thousands of civil servants have been given BlackBerry devices even though their work is nine to five and that police uniforms for different forces were ordered in separate job lots from the same suppliers, wasting millions of pounds.

What caught my eye was the suggestion that £20 billion a year is spent on property alone, with £10 million going on renting empty offices, including in central London.

Given this, surely it is only logical that any recommendations from the Green review must seriously examine whether it should start moving its offices out of the most expensive part of the UK to relatively cheaper regions such as Wales. However, as the debacle over the closure of the Newport Passport Office shows, Whitehall officials still have a long way to go before they break their London-centric mindset, although the financial savings identified by Sir Philip may give them little option.

Comments

Bonnie Boy said…
Having read the coverage of Philip Green’s Review on BBC news, it is obvious that he has taken a major retailer’s view of government spending, i.e. maximise contract value and beat the supplier down to the lowest price: An approach, which, I have no doubt, will meet with the approval of the CBI, as this approach favours big business.

However, this approach to public procurement is exactly what WAGs ‘Opening Doors Charter’ was introduced to discourage. Since the beginning of 2005, WAG has introduced a number of procurement policy changes, such as ‘Opening Doors’, along with other sources of support to help Welsh SMEs to win more public sector contracts, including sell2wales, Contract Shop (unfortunately no longer funded) and the Supplier Development Service (formerly the Local Supplier Development Project). These changes and support have been reasonably successful in assisting Welsh SMEs into the Public Sector supply chain. It would be a shame to see some of these changes reversed and a return to the old policies (such as contract value/supplier turnover ratio’s), where smaller businesses are squeezed out by bigger, cheaper suppliers.

I’m afraid that if Mr. Green had his way, the loss of public sector contract access would be yet another blow to the SME business community.
Jeff Jones said…
Bonnie Boy is right about centralised procurement and its effect on SME.Green's suggestion is for the government to use its buying power to drive a hard bargain as he dies with his suppliers. This obviously means buying from the cheapest on a large scale. This is not going to help SMEs. He also suggests that government should adopt his attitude to paying bills which is hang on for as long as possible. I wonder what this would do for the cash flow problems of SMEs. The FT also highlghts the unintended consequencs of moving government offices out of London and signing long term contracts and then abolishing the agency. It's not difficult to save money but there are consequences. We could,for example, buy much of our defence equipment on the world market . The US rifle is better than the one used by UK troops . It's produced by Colt and costs half the price and is the preferred killing instrument for the SAS. But where would that leave the UK companies and their employees who produce the present weapons? What the Coalition is going to find is that it's not easy to cut 25% from government budgets.
Anonymous said…
I was going to mention the problem of clumping contracts together, and this practice will only benefit larger businesses. This would hit the Welsh economy worse.

I didn't have to explain too much though as Bonnie Boy said exactly what I was going to say.

I would just like to highlight a couple of other things.

1) in Wales, each 1% increase in governent spend that goes to Weslh SMEs equates to 2000 jobs for the Welsh economy.

2) I am completely in favour of cutting waste in government. It buggs the c**p out of me..BUT on the subject of procurement, we cannot expect government to act like big businesses and look for the cheapest supplier. Sir Green may have made his billions by making use of economies of scale, but his wealth also relies upon squeezing every last penny out of his suppliers, most of which only compete by employing child labour in india.

And I wont mention how his billionaire retail empire rips the heart out of SMEs.


Yes, make saving....but I really wouldn't want savings based on what a big business billionaire owner thinks is the best for the economy.

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