"Money poured down drain" by public sector,
says OGC

16 January 2006
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16 January 2006 | Rebecca Ellinor

The public sector is "pouring" money down the drain by paying up to 50 per cent more than it should for some goods.

It is also employing consultants to do the same work already done for other public sector organisations.

That is the view expressed by Richard Abbott, executive director for the procurement workstream at the Office of Government Commerce in GCforum, an OGC electronic newsletter distributed to public sector procurement managers.

His team has been given the task of helping departments to deliver £8 billion of savings. Asked whether it could be done, he said: "Together, yes of course we can [do it]. Don't tell me what you can't do - you can't make excuses when there is money pouring down the drain.

"Benchmarking exercises have shown big differentials in the prices paid for goods - as much as 50 per cent. If companies are making a profit at the bottom price, what are they getting at the top?

"People working on similar projects are often using the same consultants to give them the same information - this has all got to stop."

However, Abbott said he was impressed with the amount of work already undertaken.

"There is an environment where collaboration is actively encouraged and where commercial arrangements are available to an increasingly wide audience. If you are not taking advantage of all this, then you need to explain why. If you have something better, then great - I will be round tomorrow morning to pinch your ideas."

He also warned against waiting to implement the best ideas: "We have to be pragmatic. Very often, hanging out for the best takes too long and costs too much. And in any case, what is best today is usually exceeded tomorrow. So settle for good and let's up the pace."

As reported by SM this month, the OGC's spend on consultants was put in the spotlight after a Freedom of Information Act request by The Times newspaper revealed it almost doubled spend on consultants, interims and fixed-term contractors, from £5.8 million in 2003-04 to £9.2 million in the 2004-05 financial year. This represents more than a fifth of its annual £43 million budget.


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