Every now and then, the government will push a report that’s so asinine, and so thin, you have to check it’s not a spoof. The Daily Mail was clear in its coverage: ‘Council incompetence “costs every household £452 a year”’; ‘Up to £10bn a year is wasted by clueless councils’. And the Express agreed. Where will this money come from? ‘Up to £10 billion a year could be saved … if councils better analysed spending from their £50 billion procurement budgets.’
A 20 per cent saving on the £50 billion council procurement budget would be awesome. And this is a proper story, from a press release on the Department for Communities and Local Government website: 20 per cent of the £50 billion procurement spend could be saved by seeking better value.
Government ministers have an army of intelligent technical staff, with full access to every speck of data, ready to produce research. But these figures come from a ‘new, cutting-edge analysis of council spending data by procurement experts Opera Solutions’.
I downloaded the ‘Opera Solutions White Paper’. I recommend reading it yourself, to understand what a minister considers a substantive piece of research.
The ‘full report’ is six pages long, not including the cover. The meat of it, the analysis, is presented in a single three-line table. Opera took the recently released local government spending data for three councils, and decided how much it reckoned could be saved by bulk purchasing.
It did its estimates on three areas: for energy bills (a £7 million spend) and solicitors’ fees (£6 million), it thought councils could save just 10 per cent. The third category – mobile-phone bills – was tiny in comparison (just £600,000 spent), but here, and here alone, Opera reckons councils can save 20 per cent by getting people on better tariffs.
So, for mobile phones, an incompetently regulated sector well known for making money from deliberately confusing pricing schemes, where phone companies hope customers will regard checking their usage and changing tariffs as more effort than it’s worth, Opera reckons councils can save 20 per cent.
Then, even though for £13 million out of £13.6 million of its spend calculations Opera could only find 10 per cent of savings, it cheerfully applies this magic 20 per cent from the tiny mobile-phone spend to the entire local government procurement budget of £50 billion, magicking up £10 billion of savings, £452 a year for every one of us.
And even before that astonishing, shameless bait and switch, these figures are all presented out of nowhere. There is no working at all for any single saving, no description of how 10 per cent or even 20 per cent was calculated: just that three-line table telling you how much Opera Solutions reckons councils can save. There’s also no justification for choosing energy, solicitors and mobile-phone bills, out of all the things councils spend on. Were these where Opera thought it could get the biggest savings? Who knows.
The document is six pages long. We’ve covered one page. What’s in the rest? All that follows is a four-page glossy brochure advert for Opera Solutions’ management consultancy services in local government. ‘Opera Solutions has successfully completed procurement optimisation projects for hundreds of organisations around the world’; ‘Opera partners with clients to work as a catalyst’; ‘Opera addresses these issues through Insight CubeTM technology, which creates deep visibility into spending information.’
Meanwhile, back in the real world, what do local governments actually procure? Well, the biggest thing, about a quarter of that £50 billion budget, more than £10 billion a year of local government procurement, is social care: mostly residential care, mostly for the elderly, and most through the independent sector.
If you’re going to save 20 per cent off that, then I suggest you tell us how, in full and educative detail. In the meantime, saying you can get us a better deal on our mobile-phone tariff, and then pretending that means you’ve taken 20 per cent off the entire £50 billion local government procurement spend, isn’t just misleading: it’s the reasoning of a ten-year-old.