Friday Rant – we’re all dooooomed

Jason Busch at Spend Matters (see previous posts) has what he calls his 'Friday Rant' where he sounds off about something that bugs or bothers him.   Seems like a good idea....not sure this is really a 'rant' but fits the mood of a gloomy Friday afternoon!

I was browsing some political blogs and websites today and this really hit me. Here's the scary bit (for UK readers) ...

"Government spending has now soared to almost £200 billion above income -  virtually the sum of the entire health, education and defence budgets."

That £200 billion is an annual figure by the way.  So that is just under £4 billion a week, or £23 million an hour.   So, given that this is unsustainable for very long, is this a great opportunity for public sector procurement people to make a huge impact over the next few years?  Or is anything procurement can do just going to be tinkering at the margins given the sheer enormity of this problem?

One of my major concerns about procurement's ability to contribute in a significant way to this is that so much public sector spending is actually quite inelastic, for three reasons;

1. Many major public sector contracts - PFI, outsourcing etc - are relatively inflexible in terms of the contractual conditions and the ability to negotiate reductions

2. Third party spend in many categories does not naturally fall even if internal headcount does; spending on buildings, IT etc will not automatically decrease even if staff numbers do.

3. Some public services are just impossible to cut in the short term.  As one senior public official said to me this week; "you can't cut the social care budget by 10% overnight unless you are prepared to throw old people out onto the street".  Or (as I thought to myself), open a few branches of Dignitas in Cheltenham, Tunbridge Wells, Lytham, the Isle of Wight....

So...what are the big ideas for public procurement?  How can we as a profession take £20, £30, £40 billion out of the annual procurement budget for the public sector?  We will come back to this subject I know over the next weeks and months but if you have any answers then comment here, or simply put them on a postcard to Messrs Brown, Cameron, Clegg, Osborne, Darling....

Peter Smith

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  1. Guy:

    There is no such thing as a gloomy Friday…….its the start of the weekend for Ch***t’s sake! 🙂

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