Public procurement savings dwarfed by growing UK debt

We will bring this back to procurement, but forgive me a round-about route. Fraser Nelson is an excellent political writer, and a lifelong Conservative Party supporter. So when he headlines an excellent piece on the Spectator websiteDavid Cameron tells porkies about Britain’s national debt”, you can assume this isn’t a typical political attack. It relates to a party political broadcast last week, in which Cameron said this:

“So though this government has had to make some difficult decisions, we are making progress. We’re paying down Britain’s debts.”

Here is Nelson’s comment on that;

“David Cameron’s policy is to increase Britain’s debt by 60 per cent, more than any European country. To increase it more over five years than Labour did over 13 years. Just yesterday, we learned the national debt had hit £1,111 billion and it’s heading to £1,400 billion.

By no stretch of the English language can this be described as “paying down Britain’s debts.” What Cameron said is not an exaggeration. It’s a straight falsehood, and one that demeans his office”.

The government has reduced the annual deficit since its peak in 2009/10, although it looks as if the 2012/13 deficit may turn out to be very close to that of 2011/12. But the UK will still borrow – stripping out some one-offs – around £120 BILLION this year. And government spending is running at a level around 5% HIGHER this year than the last financial year – so much for austerity!

specttaor

So – back to procurement. Firstly, these figures are an antidote perhaps to some of the economic optimism that has blossomed in the last couple of months. And whilst there have been some genuine savings made in public sector procurement, unless things get better rapidly, it is going to be hard for the government to argue at the next election that they have been incredibly competent and careful with our money when the UK’s debt has risen by over £600 billion on their watch. That is £10,000 for EVERY man, woman and child in the UK.

Quoted procurement savings, even if they are reasonably well grounded, are unfortunately going to come up against credibility issues, and frankly those savings will look like a rounding error if the opposition focuses on that “borrowed £600 billion” headline as we go into the next election.

 

First Voice

  1. Dave Orr:

    The real issue is trying to shoehorn economic cycles into electoral cycles.

    Many of us warned that trying to rectify the recesssionary impacts and debts following the banking crisis within just five years (so that it fitted in with the 2015 election date) would risk cutting too hard and too fast, thereby knocking confidence & stalling growth.

    The trick to pull off was to make savings whilst preserving confidence and promoting growth.

    The situation we now face was predictable and was predicted in 2010.

    And I cannot post about deceitful savings figures without drawing the inevitable comparison with the IBM (75% owned) so-called Joint venture Southwest One where their web site continues to publicise the 2007 myths about spend and savings despite a High Court hearing in November about IBM charges (through SW1) versus the lack of claimed savings:

    “One of the main drivers for creating Southwest One was formalised collaboration across the three organisations to radically transform the Procurement Service into a centre of excellence tasked with delivering savings of around £200M over 10 years on a combined annual spend of more than £500m.” Ian Conner, Chief Procurement Officer

    Mr Conner (ex Post Office) remains in post despite another myth that the private sector does NOT tolerates under-performance whereas the public sector does.

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