Lord Sugar: ''Pay public buyers private sector wages''

24 November 2011

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25 November 2011 | Adam Leach

Salaries of public sector buyers should match their counterparts in the private sector, according to Lord Sugar.

The peer and businessman said the extra cost of bringing them into line would “pale in comparison” to the savings generated by closing the skills gap. He argued that increasing pay levels and offering performance-related bonuses would increase competition for government procurement roles, enabling it to pick more skilled individuals capable of delivering more extensive savings.

Speaking yesterday during a House of Lords debate on government procurement, which he tabled, the star of The Apprentice argued the move would result in government driving the same degree of savings seen in the private sector.

The chairman of Amshold said the £238 billion a year spent by central government could be reduced to around £200 billion if a group with a strong commercial background staffed government procurement. He proposed the savings generated would significantly ease the public purse. “If this group [government purchasers paid private sector salaries] cost £50 million, then that would pale in comparison with my £200 billion,” he said.

Sugar went on to say that in order to deliver, the government would have to risk criticism from the press: “Would the government have the guts to do this, or would they be scared off by the headlines?” Forecasting the theme of resulting headlines, Sugar told peers: “Fred Smith [government purchaser paid high salary by taxpayer] earns x amount while Joe Bloggs [taxpayer] struggles.”

A Cabinet Office spokesperson told SM that they have taken a number of steps to implement private sector best practice in government: “We have already successfully launched an employee interchange scheme with the private sector to share knowledge. We are also improving existing skills by mandating training of lean procurement principles for civil servants running major procurements and looking to develop a “commissioning academy” to skill up procurers in the wider public sector.”

During his speech, Sugar said he had met with senior civil servants responsible for procurement and had been “impressed” by the approach they were taking. In its first 10 months, the Efficiency and Reform Group reduced central government spend by £3.75 billion.

Sugar also suggested that due to the opportunities presented by the internet, such as online buying portals, there was no longer any need for local purchasing. He also added that placing “procurement in the hands of unqualified people” is “similar in some cases to letting kids run riot in a sweet shop”.

The full text of Lord Sugar's address can be found here 

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