Government Efficiency: Sir Philip Greens’ Report

Lord Taylor of Holbeach Excerpts

Thursday 14th October 2010 Lords Chamber

[Lord Eatwell]

To ask Her Majesty’s Government what is their response to Sir Philip Green’s report on government efficiency, published on 11 October.

[Lord Taylor of Holbeach]

My Lords, as Mr Francis Maude, the Minister for the Cabinet Office, said on Monday, Sir Philip Green’s findings clearly demonstrate the scale of inefficiency and waste present in the system today. It is clear that there is a huge opportunity and a real willingness on behalf of civil servants to take on the important task of delivering efficiency. We welcome the sense of urgency that Sir Philip has brought to this work and are looking at how we can best take forward key recommendations.

[Lord Eatwell]

My Lords, I thank the Minister for that reply. Is he aware that we on these Benches welcome many of the conclusions in Sir Philip Green’s report? It is the latest in a long line of similar initiatives, such as those in the report of Sir Derek Rayner in the 1980s which uncovered gross inefficiencies in the Government of the noble Baroness, Lady Thatcher, and in the work of Sir Peter Gershon for the Labour Government, saving many billions more than the Green report identifies. However, we find the key conclusion, emblazoned on the cover of the report, that,

“The Government is failing to leverage both its credit rating and its scale”,

very disturbing. Translated into everyday language, that amounts to a recommendation that the Government abuse their market power to worsen payment terms and force down supplier prices. Will the noble Lord join me in supporting good practice in business and reject Sir Philip Green’s invitation to the Government to abuse their market power?

[Lord Taylor of Holbeach]

My Lords, I thank the noble Lord for his exposition of the Opposition’s position on this matter, but to answer his question, it is true that the Government have failed to leverage their position. Perhaps I may give an example that in fact stems from the previous Government, energy, which is a very good example of what can be achieved by using leverage. The purchase of 75 per cent of electricity and gas requirements has been centralised in an expert team, resulting in cumulative savings of £500 million. That is a substantial sum and something worth achieving.

[Lord Martin of Springburn]

My Lords, I do not doubt that the senior officers of both Houses will be looking at efficiencies for this great historic building of ours. Can I ask for assurance that, in doing so, we never reduce the standard of security? I ask this not for selfish reasons, but because we have a dedicated staff of thousands of people here, as well as thousands of visitors. We owe it to them to make sure that security is not loosened in any way because of so-called efficiencies.

[Lord Taylor of Holbeach]

My Lords, I think I can reassure the noble Lord on that point because I have read Sir Philip’s recommendations, and there is no recommendation on security matters. However, I am sure that the appropriate committee of this House and the other place will make any necessary judgments on these matters.

[Lord Maclennan of Rogart]

My Lords, do the Government recognise that this headline-catching report is one in a succession of reports following that of Sir Peter Gershon? Some of its recommendations for centralised procurement seem to run counter to the Government’s own intentions about the localisation of accountability and to the fact that the greatest savings can be made not in centralised government spending but in respect of spending by the health service, the education sector and other decentralised public bodies? Does he agree that the Government should not rush to judgment in proposing to institute a major, overall purchasing authority, but should consult widely before they do so?

[Lord Taylor of Holbeach]

My Lords, inevitably, the Government will strike a balance on these matters. They see decision-making as essentially a local issue, but there are opportunities in the centralised negotiation of price.

[Baroness Liddell of Coatdyke]

My Lords—

[Lord Sugar]

My Lords, using his own words, Sir Philip says that his findings are nothing more than “common sense”, and I absolutely agree with him. He has produced a very good report in the short period of time he had to do it in. But does not the noble Lord agree that it is time to centralise buying and to bring in some kind of head honcho from the private sector who knows what they are doing and pay them the right amount of money, which they would be paid in a large organisation? If you do that, you will end up paying someone a rather exorbitant amount of money that is many multiples of what the Prime Minister earns. However, Sir Philip did admit, in another of his famous statements in the report, that if you pay peanuts, you get monkeys. [Laughter.]

A noble Lord: You’re fired!

[Lord Taylor of Holbeach]

I think the noble Lord is seeking from me the phrase “You’re hired”, but I fear that is not within my gift. The Government intend to take these proposals forward and the Efficiency and Reform Group is dealing with these matters. There are opportunities: for example, the telephone bill across government is £2 billion. At that level it will be worth the Government buying their own capacity within the telephone service. I am sure that that is the kind of decision the Government will pursue.