Did Sir Philip Green Get It Right?

Posted on October 16, 2010

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Below is the actual review prepared by Sir Philip Green regarding the inefficiencies of the UK government’s procurement policies and practices.  Please note that it also includes a brief introduction video after the first slide.

While we all take the time to review and digest the findings of Sir Philip, especially his assertion that “The Government is failing to leverage both its credit rating and its scale,” I am very much looking forward to Monday’s SSON sponsored roundtable discussion where I will be joining a frequent guest on the PI Window on Business Tim Cummins.  The only difference this time is that I will be on the guest panel side of the mike.

Now some of the key points that I believe are worth noting, and which I will obviously be raising during Monday’s broadcast, center around a number of key or critical areas, not the least of which is how seeking the advice of a successful businessman from the private sector coincides with the New Public Management or NPM concept that was first championed in the public sector in the late nineties.

While I have repeatedly made reference to the NPM concept or ideal, referring to it most recently in the October 14th, 2010 post titled “IACCM CEO Cummins discusses government waste due to poor contract management,” as well as the February 16th, 2010 article “A Revenue Positive Business Model in Public Sector Purchasing (Part 1),” the chasm between purported private sector expertise and promised public sector success as often remained wide and quite frankly unbridgeable.

Certainly the following excerpt from an October 10th BBC News article by Robert Preston would seem to provide some answers into why previous collaborative efforts between the private and public sectors have produced little if any tangible benefits for governments and ultimately taxpayers when he wrote;

“Some would say that asking Green to advise on making the public sector more efficient is like asking the manager of a highly successful football team to run the Red Cross: it might work, but the difference in culture, scale and complexity between the business of government and the business of business presents significant challenges.”

However, Preston does go on to add that there is a certain “logic” in terms of the government seeking Sir Philip’s counsel.

While I will reserve commenting on the viability and the practicality of Sir Philip’s recommendations, it would be safe to say that the government had to do something to get a handle on the challenges associated with current procurement policy and practices.  After all in my 2009 white paper “Prescription for Success,” I made reference to an article in the Telegraph which stated that “Procurement practices in some parts of the National Health Service (NHS) haven’t moved on substantially in the last 60 years, “and that by “adopting best practices, as used by other health care organisations, the NHS could save up to £2.1 billion (or $3.07 billion US) each year.”

In the same paper, and perhaps underlining what Prime Minister David Cameron called “some crazy decisions on IT spending,” I had reported that of the close to $4 billion US that was spent on the creation of ideas within the NHS, only a relatively “small proportion” – approximately $224 million US – is actually spent on spreading the innovations down to the patient level.

Based on just the NHS example alone, it is clear that a great deal of taxpayer money is being frittered away by breakdowns in key areas of government spending.  But we still come back to the same question which is simply this, can a private sector approach to public sector procurement actually work, and more specifically can Sir Philip Green’s recommendations provide the framework by which this can finally be accomplished?

It looks as if there will be a great deal to write about as well as talk about over the upcoming months.  In the meantime a good starting point is reading the actual review, which I am pleased to provide you with by way of the SlideShare display below.  (Note: if you have difficulty viewing the presentation in your browser, simply select the “view on slideshare” button in the lower right hand corner of the viewer.)

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