It was 1978 when Ian Drury released the cult classic ‘What a Waste’, but it seems little has changed since then.
I was honoured to be elected to the Public Accounts Committee after entering parliament. Since then I have been amazed that while people’s lives and livelihoods are being blighted by the government’s ‘too far, too fast’ cuts agenda, so much public money is being wasted.
While we certainly cannot claim that reducing waste would eliminate the deficit, massive waste certainly exists.
Waste is a moral issue. In government, we do not spend our own money. It is easy to forget that public money does not come from a faceless Treasury department, but from the public who work hard to earn it. So we have a duty to spend taxpayers’ money in a responsible way.
In my time on the PAC we have considered a number of projects that have been bad value for tax payer’s money. We should highlight these examples and be ready to explain to voters how we will do better.
While the government are cutting £81bn in this parliament, the Times has calculated that PAC reports over the last two years show that more than £31bn has been wasted.
For example:
The MoD is well known for its poor performance in terms of value for money. The Major Projects Report found that despite cuts, defence equipment programmes are £6.1bn over budget, an increase of £466m from last year.
Furthermore, Liam Fox’s decision to alter the aircraft flown from the new aircraft carriers, currently under construction, caused a massive redesign that will add billions to the final bill.
The administration of HMRC has been questioned recently, as the committee discovered that in their negotiations over unresolved tax disputes at least £10.9bn of unpaid tax last year will never be collected. This includes £20m from investment giant Goldman Sachs.
In the NHS the NHS care records system has cost £6.4bn already, £2.7bn of which has brought no recognisable benefit.
These cautionary tales highlight a serious knowledge gap in Whitehall. The Civil Service does not have the expertise in procurement that industry does, so negotiations are often one-sided and end up representing poor value for the taxpayers.
There is also evidence that when purchasing IT systems or complex equipment civil service mandarins do not understand what they are buying, often tying themselves into long term deals without the flexibility to improve the terms. An obvious solution is to train civil servants in the skills required for procurement and negotiation.
After quizzing civil servants on the PAC, they say they are addressing this core skills gap, but we must wait and see what form this takes. This relatively small outlay could save billions in future government spending, and reassure the public that we are looking after their money.
So while Ian Drury could have been a lawyer, doctor, or ticket man at Fulham Broadway Station in 1978 – perhaps in the future he could be a government procurement expert or project manager?
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Nick Smith is MP for Blaenau Gwent
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Actually, the aircraft carrier bill will be substantially lower due to the changes by the current government… whilst it will add hundreds of millions to the bills for the carriers themselves, it will remove billions from the purchase and maintenance of the jets that will be based on it.
Ian Dury will not become a government procurement expert as he died in 2000. Had he lived, it would be a strange choice of job – What A Waste lists all the boring careers open to him had he not decided on a life of sex and drugs and rock ‘n’ roll. Good try at being down with the kids though.
As long as there is procurement there will be ‘waste’ as the suppliers of these contracts will go out of their way to ensure it. Try to reduce it yes, but you cannot get rid of it.
Were Trident and the carriers really necessary in the first place? Is HS2 essential? What about the cost of locking up so many people? Perhaps we should think about our lifestyle before complaining about prices in Harvey Nicks
Good article, Nick. The NHS computer mess up would not have been solved by better procurement – it was just conceptually wrong to try and make one big system. If each hospital had been left to get electronic patient recording as stage 1 (plenty of off the peg software for this) and sort out information exchange later a lot more could have been achieved at far less cost. Too much top down thinking and desire for super system was the real problem. Probably same applies at defence.
Ian Dury … spoke to my generation not ‘the kids’ & I’m 60 ,so that was an attempt to speak to rock music people who respected the highly unusual fact of seeing what Ian would all too quickly have put it himself, to see a cripple sing.
Ian Dury … spoke to my generation not ‘the kids’ & I’m 60 ,so that was an attempt to speak to rock music people who respected the highly unusual fact of seeing what Ian would all too quickly have put it himself, to see a cripple sing.
I wonder if that went through twice because I had a warning from bt. this morning that someone was trying to fake a connection from me to this site ! no really, oooh spooks , a compliment ?
I agree with Richardarthur’s points about procurement. In the case of IT systems, there are a number of other issues.
– Risk-averse civil servants will go for the same old ‘magic circle’ of very large IT consultancies and suppliers to the exclusion of hungrier, more competitive, smaller firms (the modern equivalent of the old saying ‘no-one ever got fired for buying IBM). This oligopoly ensures its prices are kept sky-high.
– The same risk-averse civil servants will obtain temporary resource from these very expensive consultancies rather than much lower cost contractors and temporary staff. The latter requires them to use their own judgement in recruiting and managing staff – surely what they are paid for.
– They seek to avoid risk by employing the ‘comfort blanket’ of massive standards documents and 100s of pages tender documents. This massively raises the cost for private companies of tendering for such business, and the cost gets passed back to the government department in fees. It also – again – serves to exclude, smaller, potentially more competitive companies who can’t afford to tie up the resource in producing tenders that may not succeed, and entrenches the position of the magic circle.
In fact, this approach doesn’t even reduce risk. Once a supplier has got its foot in the door it can charge through the nose for any changes to spec. (And there are always changes to spec.)
We need far fewer controls and so-called quality standards (which are mostly just bureaucratic job creation programmes) and more professional project management.