Crunch time for the Coalition – it’s staff or suppliers

We've mentioned a couple of times before and after the election, including here in the context of the Becta closure, that the cost of redundancy in the public sector would be a huge constraint on any Government's ability to save money.  Today the Cabinet Office announcement on the subject has hit the headlines.

I realised this a couple of years back.  A civil servant friend of mine - about my age, 25 years service, pushing 50, was talking about the prospect of redundancy following some re-organisation.  He was a middle level manager, earning probably around £50 - 60K.  "I'm not too worried.  I should get some pension enhancement, so at worst I should get pretty much my full 50% pension from 55," he said.

"And of course I'll get around £250,000 as my redundancy lump sum".

Once I had picked myself up from the floor, I looked at the numbers and realised just how generous the terms were.  Anyway, this is the beginning of the real challenge for the Coalition, and I suspect there will be strikes over this. Which makes the need for addressing procurement even more pressing.

Fundamentally, we can only reduce public expenditure in two ways;  staff, or procurement - money spent on goods and services with third party suppliers (I'll leave the fine distinctions between grants and procurement for the moment).  What can't be saved from procuring less and better will have to come from staff cuts.  So the current uncertainty about OGC, Ian Watmore not starting till September, and the lack of visibility on progress or otherwsie on the "negotiating immediate cost savings from major suppliers" initiative is beginning to be a little worrying.

Who is driving the hard, focused look at every aspect of third party spend that EVERY public sector organisation should currently be undertaking?  Not just a bit more local government collaboration, or a copier paper contract for central government, but the whole d**m £220 Billion?  Who is laying out the options around  demand management, challenging specifications, driving savings with suppliers through relaxing contractual obligations, stronger contract management? Anyone want to put their hand up and say, "yes, that's me"?

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  1. Drew1166:

    Unfortunately nobody does Peter.

    Personally I think that effective leadership for this and related problems cannot be delivered through the civil service structure.

    For procurement/efficiency – SAVINGS – to be delivered the leadership role has to be fulfilled by a hands-on Minister. Has such a thing ever existed? Does the system permit it? – I don’t know; but I do believe that is what is needed – and it has to be at cabinet level.

    The current situation requires and demands that level of commitment from the government – someone who lives and breathes SAVINGS, someone who commands respect inside and outside the Government – without this there will never be the passion, drive, decisiveness and can do attitude to unleash the potential of good hopefully excellent procurement, supply chain management, resource leveraging/management.

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