Peston: 'I'd be bust if I ran my business the way government does'

Wookster

Surprised this hasn't been posted yet.

Green: 'I'd be bust if I ran my business the way government does'

Sir Philip Green told me that if he ran his businesses the way the government does, the lights would go out.

What he says he's uncovered is a culture where there are grotesquely inadequate controls of spending on everything from mobile phones, to travel, to property and paper.

The budgets he looked at are worth £191bn in total - and he believes billions could be sliced off that, if the government did simple things like centralising purchasing and monitoring expenditure properly.

For example, he argues that the public sector is spending around £700m a year too much on telecoms alone.

It’s the many smaller examples of waste that some will see as shocking, such as that on a single IT contract, 400 private sector employees are being hired at a daily rate of more than £1,000 per day, for tasks that Sir Philip was unable to identify.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/10/green_id_be_bust_if_i_ran_my_b.html

All I can say is wow. If £50bn could be cut just around procurement, what other savings to be had are there?

And how fecckless has Labour been with our money?

carolt

And if everyone ran their businesses the way Philip Green does, the country would be bust too. Ie massive tax avoidance.

http://www.guardian.co.uk/business/2010/aug/19/philip-green-liberal-democrats-tax

Wookster

carolt wrote: »

And if everyone ran their businesses the way Philip Green does, the country would be bust too. Ie massive tax avoidance.

http://www.guardian.co.uk/business/2010/aug/19/philip-green-liberal-democrats-tax

I'm not sure what your point is?

That his suggestions are rubbish? That legal tax avoidance is immoral? That the rich should donate to the state (who subsequently waste the money)?

Thrugelmir

Wookster wrote: »

And how fecckless has Labour been with our money?

Can't blame Labour. Down to the Civil Service Club.

I'm sure that they'll be interesting stories emerging about contracts, grants etc being placed with connected parties. As there's little accountability in many areas.

carolt

Wookster wrote: »

I'm not sure what your point is?

That his suggestions are rubbish? That legal tax avoidance is immoral? That the rich should donate to the state (who subsequently waste the money)?

That someone who personally chooses to deprive the country he lives in of £300 million in taxes by dubious avoidance schemes is not really the best person to be telling the rest of us where to save money. That if the huge companies paid the same proportion in taxes as ordinary working people did, there'd be no need for the massive austerity measures likely to hit us all soon.

Or take a look at Vodafone's £6 billion - yes, you read that right - tax avoidance:

http://www.private-eye.co.uk/sections.php?section_link=in_the_back&issue=1270

carolt

Thrugelmir wrote: »

Can't blame Labour. Down to the Civil Service Club.

I'm sure that they'll be interesting stories emerging about contracts, grants etc being placed with connected parties. As there's little accountability in many areas.

Well, it's a good thing that we now have a govt that doesn't believe in centralised govt. That'll save money. Not.

JP45

My initial reaction on reading this was that much of what Green has uncovered and the recommendations he's making appears to mirror the findings of the previous Gershon review. The same thought evidently occurred to Robert Peston, hence the following update to his report:

I’ve had a brief chat with Peter Gershon, who advised the previous government from 2000 to 2004 on how to make savings in procurement.

He says that he is supportive of Sir Philip Green’s central argument, that there should be more centralisation of purchasing by the public sector (or what Gershon calls more "aggregation of demand").

He says that in his work for the then Chancellor of the Exchequer, Gordon Brown, he put in place systems to facilitate the centralisation of purchasing.

But Brown did not order departments to centralise purchases.

And nor was there any serious move to standardise specifications for goods and services bought by different departments.

Different parts of government retained considerable discretion to choose different kinds of computers, and stationery, and mobiles phones, among others.

Which of course meant that their individual orders were smaller, and therefore there was less scope to yield savings from placing huge orders.

The corollary is that taxpayers arguably ended up paying more than was necessary to equip the public sector.

So I guess we can add this to the lengthy list of Grodon Brown's failures in office.

But I think it also illustrates a wider and in many ways more depressing point, namely the repeated failure of public bodies / governments (of all complexions) to adequately follow through on the recommendations of such reports.

What is the point of commissioning expensive and exhaustive reports if they simply end up on the shelf collecting dust. If the recommendations of the Gershon review had been fully implemented, plus similar such recommendations from the Audit Commission, then arguably there'd have been no need for this latest review by Sir Philip Green.

Anyone care to bet that there won't be a further review in a few year's time, making the exact same points all over again.

Wookster

carolt wrote: »

That someone who personally chooses to deprive the country he lives in of £300 million in taxes by dubious avoidance schemes is not really the best person to be telling the rest of us where to save money. That if the huge companies paid the same proportion in taxes as ordinary working people did, there'd be no need for the massive austerity measures likely to hit us all soon.

You call it dodgy, but is it illegal? A simple yes or no will do.

You are missing the point that you cannot tax companies to the same extent that you can tax people. Companies are far more mobile, have far more resources at their disposal and simple relocate. See Henderson Global Investors, Wolseley etc, to name just a few.

Or perhaps you don't think we need big companies?

Regarding centralisation, there is a difference between centralised logistics and centralised decision making. Can you tell the difference?

Cleaver

carolt wrote: »

That someone who personally chooses to deprive the country he lives in of £300 million in taxes by dubious avoidance schemes is not really the best person to be telling the rest of us where to save money.

Completely agree. The cheek of telling the government how best to save money whilst using dodgy schemes to not pay tax to that same government is beyond ironic. I don't really care if his ideas are fantastic, it's still hypocritical.

I wonder if one of the suggestions in his report was to out the NHS under Samantha Cameron's name and register it in the Cayman Islands?

olly300

Thrugelmir wrote: »

Can't blame Labour. Down to the Civil Service Club.

I'm sure that they'll be interesting stories emerging about contracts, grants etc being placed with connected parties. As there's little accountability in many areas.

True- Thatcher found one outsourcing company had hoodwinked and ripped off the tax payer while she was in power so banned them from doing government work.

Unfortunately Nu Labour was sweet talked into lifting the ban and giving them work before they went bust.

olly300

Cleaver wrote: »

Completely agree. The cheek of telling the government how best to save money whilst using dodgy schemes to not pay tax to that same government is beyond ironic. I don't really care if his ideas are fantastic, it's still hypocritical.

I wonder if one of the suggestions in his report was to out the NHS under Samantha Cameron's name and register it in the Cayman Islands?

One of his suggestions is to delay paying SMEs to save cash.

Now some posters on this board can tell you that government departments already take their time paying SMEs so any more delay would mean that only large enterprises would compete for government contracts raising the price