Readers’ Comments — on Government Savings, Academic Journals and Wonga

We haven't reported on our readers' comments for a while -- there have been so many interesting procurement news items, CEO/CPO announcements, mergers, opinions, research and of course our guest articles to publish.  But we do love it when our readers are so engaged they take the time to leave a comment. So let's take time now for a brief overview of which posts our readers are responding to and what is stirring up the most debate.

UK Government Procurement Savings - introducing inflator brings a £300M+ boost to the numbers 

Wow! that provoked quite a lot of comments, understandably. We were of course reporting on the The Cabinet Office savings figures which were released for 2013/14, and asked why they were announced with such little fuss compared with previous years. Then we began to dig a little deeper and divulged our musings -- our readers were as skeptical as us: here's what you said in response.

Tom McAra pointed out:

"Glad someone is keeping an eye on this. Three small points. First I’ve never been able to work out how savings can be divorced from consumption and inflation. eg if consumption doubles but costs go up 50% presumably thats a good thing for procurement. Secondly everything I’ve been reading about the new saviour of the public sector- commissioning -seems to criticise the continued emphasis (fixation?) on cost savings. Thirdly when a claim for a saving of one billlon is made for one year are we really to believe 20m per week, 3m per day, 380k per hour has been saved? Was it really that bad?"

Trevor Black's retort was swift and succinct:

"None of this cost savings rubbish produced every year has any credibility. Most figures produced by government are politically driven and do not relate to the reality. A more imaginative approach would be to produce figures on cost avoidance but then again I doubt whether we could trust this information as well."

And it spurred Ian Roadnight (great name! must look up etymology) to ask further questions:

"Wouldn’t education or local government spending also reduce considerably as a result of the increase in academies? Is this a saving accounted for in “demand management” or is it still in the system and measured with the central and local government figures?"

We're still open to answers ...

Buying Academic Journals - much more complex than you might think!

We took a look at a major spend area for tertiary education -- academic journals -- and reported on the big differences in subscription prices as discovered in a recent US research study. It caused us to look more closely at the market dynamics.

Dr Gordy clarified it further with some very interesting points:

"Thanks Pete, a fascinating area. Two interesting points I think you have missed. The authors of academic papers do not receive payment (yet they are also consumers and sales – pointing students to recommended reading). Peer reviewers do not receive payment, yet they are also consumers. Journals can’t function without authors and peers reviewers. There are actually a very small number of publishers although many journals. Power in turn should be with authors and reviewers, yet it appears no university or consortium has been able to harness the power of access to its authors or peer reviewers to negotiate a deal with publishers. Also worth considering the consumption of the NHS as a producer and consumer of academic journals.

Wonga -- In Praise of Its Efficient Transactional Management

We don't put a lot of store by Wonga, but we were prompted to consider why it has been so successful in competing with the traditional pay-day lenders, and we put it down to its efficient and automated transaction management, which ultimately allows it to make money even on the smallest of loans.

Grover & Ross gave us this food for thought:

"You’re charitably assuming they want the loans paid back on time.
What if the profit is in those who don’t pay? – The poor sods who end up paying the loans back several times over."

Indeed - and of course we've seen Wonga in trouble in the last few days for issuing fake lawyer's letters. More on that to come, I suspect!

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