Ian King , Jill Sherman and Roland Watson
Billions of pounds could be cut from public spending after the short,sharp investigation into government finances by Sir Philip Green, the retail entrepreneur.
Sir Philip estimated that Whitehall could save between £600 million and £700 million on the Government’s £2 billion telecoms bill alone.
The tycoon, who was asked by David Cameron two months ago to study government efficiency, did not put an overall figure on the amount of money that could be saved. But Sir Philip, whose Arcadia empire includes Topshop and Dorothy Perkins, insisted that the “prize for the taxpayer” was “too big and significant not to chase”.
He told The Times: “The total sums I’ve looked at here are just under £200 billion. If I can get to X per cent of that — well, it can’t be a small sum, can it?”
In a damning report, which was sent to the Prime Minister on Friday night, Sir Philip laid bare numerous examples of waste and inefficiency that he described as “shocking” and “unacceptable”. They include a case where government departments ordered computers from 13 different suppliers, spending between £353 and £2,000 on essentially the same product. He pointed out that government departments have no centrally agreed policy on car hire and, as a result, spent between £27 and £119 a day for the same service.
Sir Philip also highlighted Whitehall’s 68 deals with the same mobile phone company, saying that one centrally organised contract could bring substantial financial rewards.
The biggest single failure across Whitehall was the way that the Government’s buying power was not exploited, he said.
He added: “Is there any excuse why the Government doesn’t put Microsoft, IBM, Dell — the four or five major companies from which they buy things — in a room and then beat them up for the best price? There’s no excuse for not doing that.”
Sir Philip identified numerous examples where the Government was paying “above the market price” for printing services. He gave examples of Government leaflets that, depending on which department was ordering them, could cost between £1.31 and 26p for the same item.
Other examples he cited included office supplies, on which the Government spends £84 million, split between five different suppliers and with 83 individual contracts. He found that different departments were paying anywhere between £8 and £73 for a box of paper and between £86 and £398 for printer cartridges.
Sir Philip also revealed that his team had discovered that there were 140,000 procurement cards in circulation, 71,000 of which were in Whitehall, each with a monthly spending limit of up to £1,000 which are not being monitored.
He added: “That means people carrying these cards can spend £1,000 per month on whatever, they need no authorisation, no monitoring.”
The tycoon also disclosed that the Government uses 400,000 room nights in London every year, at a cost of £38 million, ranging from £77 to £117 per room. He said: “Haven’t these people heard of videoconferencing?”
Responding to Sir Philip’s recommendations, Mr Cameron said it was a “solid” report that identified how much money had been wasted. He told a press conference that public spending had increased in recent years, yet “crazy” decisions had been made about property, computers and other goods and services.
He said: “Philip Green has given us some very good pointers about how to save money.”
Extremes of spending
Cup of coffee in staff café: highest £1.45, lowest 90p
Box of paper: highest £73, lowest £8
Printer cartridge: highest £398, lowest £86
Daily car hire (Ford Mondeo): highest £119, lowest £27
Laptop: highest £2,000, lowest £353
400,000 nights in London hotel rooms: highest £117, lowest £77
Range of estimates of annual travel spending: £2bn, £500m, £768m (Sir Philip’s estimate: £551m)