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Philip Green discovers ugly truth of government incompetence

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Sir Philip Green's review of government procurement has uncovered the type of incompetence, waste and over-charging that will be familiar to anyone who has ever read an account of any government IT project.

To begin with, he struggled to get any decent information out of central government - which in itself reduces its ability to procure anything properly.

Shopkeeper Green was first told that central government spends £2bn on travel each year. Then he was told it spent £500m - lastly, he was told £768m.

A review of the figures found they were all wrong and central government actually spent £551m. Green said he was unable to ascertain how much was spent on travel outside central departments.

Different departments pay vastly different amounts for the same supplies - printing paper varies from £8 to £73 per box, printer cartridges range from £86 each to £398.

Central government departments spend £61m a year on laptop and desktop computers, and often do not buy direct from manufacturers. The money goes 13 different suppliers who maintain an estate of 460,000 desktops and 60,000 laptops. Prices range from £353 to £2,000 for laptops.

Green referred to an IT services contract costing more than £100m a year with six years remaining. He notes that the majority of the work, for hardware and software development, is sub-contracted to another firm, so the government is paying for two profit margins. Charges are more than £1,000 per person per day, much more than market rates.

Green said: "It is a poor quality contract with no provision in the contract to reduce the annual amount payable should the development work not be required."

Another bundle of IT services contracts with one supplier with three years to run are worth more than £300m a year. Green said contract details, terms, rate cards and other prices are different across departments and costs are "significantly greater than they should be".

Fixed line telecoms are estimated to cost £2bn a year and are all negotiated separately - Green reckons savings of 30 to 40 per cent are possible if the government bought its own capacity centrally.

Mobile phones are another depressing example - total spending is £21m on 105,000 devices, with 98 per cent of the money going to one supplier. However, the government does not have one contract but 68 separate contracts, all negotiated by different departments and all ending on different days.

You can dowload the report from here (pdf). ®

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