Philip Green has discovered that the government wastes millions through being rubbish at buying stuff. His report is a case in point. It doesn’t tell us anything that wasn’t in the Operational Efficiency Programme or countless other reviews and expert reports. (Yes, I know Sir Philip didn’t get paid but you didn’t think he did all the legwork and writing himself did you?)
The recommendation, accepted by the government, is…..Stalinism! OK, Sir Philip didn’t actually use that term and neither, despite a quote in the Sunday Times, did Francis Maude. But the plan is to centralise procurement and impose strict rules on how much civil servants are allowed to spend without ministerial approval.
That sounds fine for central government but how is devolving the NHS to foundation trusts and 700 GP consortiums going to help achieve economies of scale? How do you centralise procurement at the same time as empowering frontline users of public services. And what of Total Place? How will collaboration between central government, the NHS, local authorities and central government work when any significant spending has to be signed off by Whitehall?
There is a contradiction between central control and the localism and community-based budgets that the government says it wants. As I have said before, it is extremely unlikely that devolution and localism will be cheaper than central control. Local empowerment might give people more control over their services (although I’m somewhat sceptical about that, and politicians tend to be reluctant to hand over any real control) but centralisation and standardisation are, as Philip Green points out, cheaper.
If you want cheap, have a centrally controlled bog-standard service. If you want localism and devolution, then you must accept that there will be duplication and many of the opportunities for efficiency savings will be lost. When organisations attempt to do both at the same time they usually end up with the worst of both worlds rather than the best. There is no reason to suppose that the public sector will be any different.
Update: Polly Toynbee has spotted the contradiction too.
Green’s report seems entirely non-political, and he seems unaware of the impossible contradictions he has landed on the government. To him this is just plain business sense: the government is one entity, national and local. For maximum efficiency it should behave like one entity. Individualistic localism and fierce competition between its components are simply not compatible with the idea of efficiency he expects from a single enterprise, with a single united objective – to produce the best services possible for the cheapest price.