Blowing the budgets

Iain Martin’s blogpost over at the Telegraph this morning discusses how the latest poll results suggest that voters are broadly in favour of cuts to public spending, though not at the expense of core services. It is a bit woolly to think that you can simply cut administrative costs or jobs and all will be well – many of the support roles are critical to front-line delivery – however this does take the somewhat naive view that the boys and girls on the front-line are all doing sterling jobs. I don’t doubt that many are, but I also suspect that the threat of some cuts there would work wonders for productivity.

I eschewed my normal bike ride to work in favour of my car today. It’s the first time I’ve driven to work this year, and thinking about it, the first time in about nine months. As a result, I had the delights of Wogan for fifteen amusing minutes this morning. Nearing my office, the traffic report finished and Wogan jested that there will be lots of roads being dug up, because March is nearly over and all the Councils will be looking to spend all their budgets before the end of the tax year, lest the Government reduce their budget for the next year.

I’ve come across this before. It is something of a universally-accepted fact of the Public Sector that if you don’t spend your budget, next year’s will be cut back, and nobody wants that. When I worked for a recruitment company, we discovered all sorts of projects suddenly kicking off in Feb/March as IT managers suddenly needed extra hands to roll out new desktops and so on. It was a theme repeated year-on-year, as my manager explained, and was a great little boost to business.

That was a discovery I found despairing. Even at the time, I had a little shiver, and wondered why on earth people entrusted with public money could be so utterly irresponsible as to spend it for the sake of not getting as much next year. Profligate spending like that is an utter disgrace, and that is one of the reasons public sector spending is so out of control – they have a use it or lose it mentality, and rather than thinking of how they can make a little go a long way, the public sector seems determined to spend it lest they get a smaller budget for the next year.

One of my contractors had once worked on a few assignments at North Yorkshire County Council, based in Northallerton. He told me about their IT stores room, where they apparently had a stash of unused laptops. These were the sort which were meant for heavy duty activity; water-resistant, shock-resistant, hard-wearing. It transpired they had been purchased a few years ago, and had never been used, but that hadn’t stopped them ordering more. Someone clearly thought it would be nice to have some, so spent some of my taxes and their council tax levies on some IT Hardware which would gather dust, unused.

I remember my manager being delighted, because one of his NHS accounts had actually signed off budget from 2007 and paid us in advance of any actual requirement just to get rid of it before the year end, with the view of using it when the next project came live. That might seem efficient enough, but he wasn’t doing it for efficiency, he was doing it to ensure he got as big a budget next year as the year past.

David Cameron, should he win the next general election, is going to have a lot on his plate. The public sector needs a cull, and it needs a change in mentality. Somehow it needs to be reminded that taxpayers money is something you have to be responsible with, and blowing through a budget for the sake of spending is a poor show indeed.

Back on my paws

A slight bout of fever and an acute case of man-flu left the Basement Cat holed up in bed for most of last week. While still feeling rubbish, boredom prevailed and has dragged me in to the office where I can infect everyone else and share the love. Or spread the misery.

An article in the current (19 February) issue of Supply Management investigates a trend of procurement professionals and buyers moving from the private to the public sector; bucking the trend of job cuts, recruitment in public sector procurement is strong. While in part the purpose of the article seems to be to point out that aside from some legislative and procedural hurdles, the pressure and expectations are not all that different, it is endemic of a larger problem in the UK.

It’s no secret that the UK public sector, and the NHS in particular, is rife with non-jobs and ‘management’ roles that serve little purpose other than to consume resources and prop up job figures; mere sink-holes for the taxpayer’s money. Then there’s that delightful little paradox (and administrative expense) of taxing people whose income comes from the taxes they – and everyone else – are paying.

In fact, Procurement/Supply Chain is an aberration, the exception that proves the rule. As a function its primary purpose is to drive down costs, improve efficiency and thereby save time and money for the organisation in question. It is the one arena in which job cuts only make sense if the organisation has contracted to a point that they are superfluous to requirements. For that to happen in the public sector, a brave government is going to have to make some significant cuts.

EU Procurement law Vs. My taxes.

I received today an e-mail inviting me to attend a seminar on EU Procurement law. There have been rather a lot of seminars on this subject lately, but this one was going for an attention-grabber:

“The EU procurement rules are fraught with difficulty.

You are required to navigate between the black letter of the law and the commercial reality of putting together a procurement.

To manage the risk effectively you need rock-solid advice on what you can and can't do.”

It went on to list a number of the hurdles and complicated rules that can make a public sector contracting exercise something of a minefield, from when you can and cannot speak to suppliers during the process, when a framework is anti-competitive and thus non-compliant, and so on and so forth.

Normally these things get the ‘delete’ treatment without any further ado; however this framed the problem faced by contracts teams within the Public Sector very succinctly. Basically, there are so many pitfalls, red tape and ridiculous levels of bureaucracy designed at making the process as ‘fair’, ‘open’, ‘transparent’, ‘non-discriminatory’, etc, etc. as possible that it becomes an uphill struggle before you even get started.

I’m not saying that any of these goals are a bad thing. On the contrary, they are wonderful principles of a free market. Public money should be accountable, and we should not be awarding the contract to someone who isn’t going to offer the best value for money.

It’s also fucking difficult to argue against the rules. They make irritating sense to a free-marketeer. If followed, they stop protectionist policies and are intended to prevent sharp practice, all good things. In fact, you can’t even say that a public body should be able to spend its money in the local economy, because the whole point of the rules is that the best response to your tender will win the business.

In other words, if local suppliers want to win the business, then they need to up their game and improve. It also means that there should be no barrier to those local suppliers winning business elsewhere in Europe, if they decide to do so. Great, in theory.

So, does that mean I’m happy that my tax money is going to line a German, or Spanish company’s offers? Well the flipside is that their tax money could well be lining those of a British company, so you could argue that it will all come out in the wash.

What I’m trying to make clear here is that the spirit of the EU Procurement rules is something I agree with. My issue is more whether or not the sheer cost of implementing the laws, enforcing them, and even writing the damned things is actually delivering us any value for money, or if in fact is costing governments – and therefore you and me as the taxpayer – a huge amount of money that could be better off back in my pocket.

It also means that the UK Government can’t say to contracting authorities (basically a body spending public cash) that they should source locally and support the British economy. It has no say over where that public money will end up. Of course I should be happy that the most economically advantageous tender will win, therefore saving the taxpayer money. It’s very easy to end up in a circular argument on this.

When the House of Commons commissioned the construction of new offices for MPs, what was to become Portcullis House, the contract for the windows went to a British firm. The problem was that a French-owned firm, Harmon, had submitted the most economically advantageous bid. Someone at the House had decided we should buy British. Harmon challenged this under a breach of the EU Procurement rules and were awarded damages in court for £1.85m. There were other aspects they could also sue for, however the House of Commons settled out of court for an unspecified fee. So the taxpayer paid for the windows twice over, maybe more. Now, can you spell colossal waste of my fucking money?

Fine, you say, live within the rules. I question not the spirit of the rules, let me re-iterate that. What I do believe in is choice. The same choice afforded to the private sector, which has far more freedom to make decisions on where it spends its money. What I question is why that accountability seems to lie with Europe, and not with the UK taxpayer. Why the fuck are some overpaid bunch of bureaucrats allowed to tell our public sector that it can’t support local businesses if it chooses to do so? It may not be the right choice, but the point is that the public sector in the UK should be responsible to the UK taxpayer, not to fucking eurocrats.

I fail to see why we need another layer of bureaucracy on top of our own, trying to tell us what we can and can’t do – private or public sector. Big government is not a good thing. More big government above a big government is worse. We have enough crap from our own politicians, we really don’t need to be subsidising eurocrats as well, and we really don’t need more layers of red tape, processes and procedures that cost the taxpayer even more money.