He had his rivals ‘green’ with envy when he turned around the ailing BHS stores; he perked up Dorothy Perkins and put Topshop top of the pile. We all realised Sir Philip Green was something special. So when he says government should be as efficient as any good business we should listen.
When the retail king says government wastes millions upon millions of pounds on the procurement of goods and services such as IT, travel, print, office supplies and the management of the government's property portfolio not only should we listen, we should act.
Thankfully, it would seem the coalition government is listening and all set to act following the publication of his Efficiency Review. Now this is no off the peg report from the colourful and larger than life Sir Philip. This is a made to measure report commissioned by Prime Minister David Cameron to review government efficiency.
His results are, in his own words, ‘staggering.’ His report highlights massive variations from department to department, which, if not so serious, would sound like a script from the iconic TV series, ‘Are you Being Served?’
When he asked about government transport costs he was eventually given three answers: £2b, £500m and £768. Just in case it pops up in the next pub quiz the correct answer is £551m.
It was when Sir Philip turned to the procurement issues that I knew he has Britain’s 1.4m freelance workers on side for his honesty and insightfulness. The government procurement bill, which covers IT, travel and consultancy, was a stunning £166bn in the year 09/10.
The Efficiency Review attacks the scale of some IT contracts as being ungainly, inflexible and too large to manage. He also cites £600m contracts where principal contractors sub-contract the majority of work to another major supplier thus ensuring two profit margins. I say, ‘top marks’ to the man from Topshop.
We at PCG have been arguing for years that splitting these mega contracts into smaller segments ensures best value for money for the public sector. We felt so strongly about the subject that we included it in our manifesto and were delighted to see it incorporated into the coalition agreement.
In this case size does matter. By splitting IT projects into smaller segments public contracts could tap into the UK’s talented army of highly skilled freelance workers, rather than using the same old big suppliers. For many contractors and small businesses, bidding for government contracts is a bureaucratic nightmare. The harsh reality is that ‘prime contractors’ dominate the process and the rules on bidding end up skewed in their favour.
Following the Comprehensive Spending Review, the British social and economic landscape has changed.
Freelancers
If we are to advance economically as a nation we must listen to people like Sir Philip Green and those like him with corporate credentials as business champions. For those looking for public sector value for money they must look to the freelance sector to provide flexibility, skills and value for money. They must be able to call on a range of skills and resources when and where they need them.
Using freelancers is a tried and tested method of getting the most out of your business, as they are solely focused on freeing up potential growth with their expertise. Freelancers add some £68bn to the UK’s economy, and could add considerably more if they had greater access to government contracts.
Many freelancers already work for large suppliers to the public sector, but costs could be saved if the government engaged more freelancers directly.
Freelancers provide decades of experience that can be bought by the hour. If Philip Green is right, this is experience the civil service would clearly find useful. The UK’s 1.4 million freelancers are flexible, highly skilled workers, ready and willing to provide their expertise.
Are You Being Served?
Listen to Sir Philip Green and you might be.