LONDON — Sir Philip Green is known for his eagle-eyed approach to retail, so it’s no surprise the owner of Topshop and Topman has pulled no punches in his one-off review into efficiency in the British government, examining spending on everything from cups of coffee to mobile phone contracts.
This story first appeared in the October 12, 2010 issue of WWD. Subscribe Today.
In August, Britain’s prime minister, David Cameron, asked Green to undertake the efficiency review as part of his quest to slash government spending and reduce the U.K.’s 155 billion pound, or $247 billion, budget deficit.
On Monday, Britain’s Cabinet Office published Green’s report, which looks into the government’s procurement of goods and services — such as IT, travel and office supplies — and the management of its property portfolio. Green, who owns the Arcadia retail group, found the government “has consistently failed to make the most of its scale, buying power, and credit rating,” according to a statement summarizing the report.
Green — who didn’t put a specific pound figure on government waste — said, “There is no reason why government should not be as efficient as any good business. Any large organization would want to use its credit rating and scale to buy efficiently. The conclusion of this review is clear: Credit rating and scale in virtually every department has not been used by government to make spending efficient.”
It’s clear the retailer had scoured every inch of the government’s books. His 33-page publication admonishes the government for everything from inconsistencies in the prices it pays for printing leaflets through to the different prices it pays for boxes of paper and printer cartridges. His report also asks a number of questions of the government. “If you were to buy a laptop for yourself, would you pay 2,000 pounds [$3,180] when the same item can be bought on the Internet for 800 pounds [$1,270]?” he writes.
On a grander scale, Green noted the government had missed an opportunity to break a lease on one of its properties in central London, resulting in four years of “unnecessary” rental costs of 20 million pounds, or $32 million.
Among Green’s recommendations are that all government procurement transactions should require authorization, that civil servants spending on behalf of the government “must apply the same principles as if the money were their own,” and that all contracts with more than 100 million pounds, or $159 million, of remaining value be audited by a central, experienced negotiating team.
Francis Maude, the minister for the Cabinet Office, said of Green’s report, “The scale of waste uncovered by Sir Philip and his team is staggering. We know that government is very different to business. But that does not mean that it should not act in a more businesslike manner. Every pound that we can take out of the cost of government is a pound that we can protect on the front line.”
A spokeswoman for the Cabinet Office said Green’s findings would “inform” the government’s spending review settlements when they are revealed Oct. 20, and “support the development of good financial management practice.”