The (not so) hidden costs of squeezing our suppliers

Make the pips squeak

“Procurement savings”

“Efficient maximisation of market opportunities”

“Outsource and save”

“Hard-nosed negotiations”

Regardless of how you describe it local government is looking at any possible way of saving money it can and with over 50% of many councils budgets coming from ‘goods and services’ it makes sense to try and ‘squeeze’ our suppliers as much as we can. Indeed, in my local authority the trade unions have taken their mantra to be that no job cuts or pay cuts should be implemented until management have demonstrated that they have hit our suppliers as hard as is possible.

The Government have also been in on the act with pronouncements covering ‘procurement’ savings that could save savings of £450 per household.

So far so sensible. If we can save money by squeezing the private (and third) sector to deliver our services more efficiently then why shouldn’t we? Indeed, one could argue that to not do so is severely irresponsible.

However, as so often with pronouncements from Eric Pickles and my local Trade Union the actual detail is a lot more complex than either would let on.

Sharing services – an introduction

Because without sharing neither of us would be able to cross the chasm

Eric Pickles and Grant Shapps are fond of responding to Local Government leaders complaining about Local Government cuts with three responses:

1. Local Authorities should not complain when they pay their Chief Executive more than the amount paid to the Prime Minister
2. Local Government would be fine if it simply abolished non-jobs (Grant Shapps claimed Manchester Council should not cut 2,000 jobs but instead get rid of their ‘twitter tsar’)
3. Local Government could make substantial savings if it did a better job of sharing ‘back office services’

We’ve addressed the first issue before and the second issue is obvious baloney so does not bear discussion (well, maybe if you’re lucky we’ll give it a run in a few weeks).

The third issue, that of shared services, is of real interest to local government and to those of us who work within it.

If a job’s worth doing, do it properly

Let's see some proper ideas for a change

I noticed this article recently, which discusses the fact that most Chief Execs won’t take a pay cut as demanded by DCLG.  I can imagine Eric Pickles’ rage and fury that an edict he has issued has been summarily ignored by those in the field.

To be honest, and I’m not going to make friends here, I can see the Chief Execs points.  The cutting of their salary by 5% is hardly going to make much of a difference in the grand scheme of things, and is nothing more than a token gesture of solidarity.  In fact it’s not even a very good gesture – if I saw my own chief exec taking a 5% cut I’d still be aware that their remaining 95% was ample to support their lifestyles.

This is typical of the small-mindedness and headline grabbing attention that is getting local government nowhere.  People aren’t worried about whether their chief execs get paid £142,500 or £150,000, they are worried about whether or not four out of five of their team will be made redundant within a few months.

This spending review, and the restructures that go with it, are a chance for us to really look at what services local government should actually really be providing, and to what standards.  We should be looking at the things people need rather than the things people want, or even the things we want to deliver because either they sound good or because we have always provided them in the past.  If a service is needed – and I mean really needed, not just desired – then we should be keeping it and delivering it to at least acceptable if not good standards.  If not, then let’s look at other ways of providing it or simply letting it go.

Instead, from my own experience we are doing none of this.  We are looking at the people in our teams, picking those that we like or those projects which have received a positive response from the media or our bosses and also looking at power bases.  Senior managers are not doing anything which will jeopardise their own status or job security (as demonstrated by Camden in my opinion), and in fact are doing all they can to be the last ones standing.

If we keep focussing on easy targets, like how much a single member of staff is getting paid, we are missing whatever chance we had of making something positive out of this awful financial situation.  Let’s stop looking at a single twig and look at the whole forest.

The king is dead, long live the king

As we have discussed before, the government recently announced that the mighty Audit Commission would be no more.  It would cease to be, become bereft of life; it would be an ex-commission.

Or would it?

There are currently murmurs that Mr Pickles has been talking with the soon-to-disappear organisation to urge them to privatise themselves.  Apparently he would like them to set up as a business and then bid in an open market to secure the contracts that they once fulfilled.

I’ve got the power

I noticed a little piece of legislation the other day which really got my mind buzzing.  Actually, it’s less a piece of legislation, more an amendment to old legislation from a bygone era.

It’s around the wonder that is power generation, in the form of electricity rather than quangos.  In previous years, to protect the emergence of new power companies it was ruled that local authorities could not generate and sell electricity to the National Grid.  When coal or nuclear power were the only real generating options this seemed to be fine, protecting an industry from the might of government interference.

However, in these greener days, the advent of solar, wind and even wave power has forced things to change, and a press release from Chris Huhne has signalled just such a change.  In a nutshell, local authorities can now generate electricity using green methods and then make money by selling whatever they don’t use back to the National Grid.

Hold on lads, I’ve got an idea

The classic phrase is something along the lines of ‘if you put a million monkeys in front of a million typewriters for an infinite amount of time, eventually one will reproduce the complete works of Shakespeare’.  Well, if apparently if you ask 65m people to come up with ideas for cutting the national defecit and saving money you’ll get a seemingly endless numbers of suggestions (whittled down to about 45,000 so far), both weird and wonderful.

In case you’ve missed it, the government have been asking people online to come up with any and all ideas for ways to cut costs, and boy have the people responded.  Interestingly, apparently two-thirds of suggestions have come from public sector staff (although take with a pinch of salt any piece of information presented with the word ‘apparently’ as a precursor).

There are literally tens of thousands of suggestions on the site, many of which are repeats, racist, xenophobic or just plain stupid.  However, there are some real gems in there, with some so basic and easy to do it really made me scratch my head and try to justify why they have yet to be done.