Business

Sir Philip Green says government waste 'shocking'

  • 11 October 2010
  • From the section Business

The government could save billions of pounds a year if it improved "shocking" spending processes, Topshop owner Sir Philip Green has said.

Sir Philip has reviewed government spending, and says it is failing to make full use of its buying power.

He said no business could survive the level of money that was wasted from the £191bn of spending he reviewed.

He believes billions could be saved if the government did simple things like checking spending properly.

Speaking to the BBC's business editor, Robert Peston, he said that between £600m and £700m could be saved on the £2bn telecoms bill alone.

'No accountability'

Sir Philip was asked to look at how efficiently Whitehall departments spent their money.

He said the information held about what the government spent on services was so sketchy that if his business was run in that fashion "the lights would go out".

Sir Philip said: "The process is shocking. There's no reporting, there's no accountability."

He told Robert Peston: "You could not be in business if you operated like this. It would be impossible."

His view is that the government fails to make the most of its scale, buying power and credit rating.

Sir Phillip runs the Arcadia Group of High Street retailers, which includes Dorothy Perkins and BHS.

His report says a lack of a centralised approach means different departments pay hugely different prices for the same items.

Sir Philip said: "The conclusion of this review is clear - credit rating and scale in virtually every department has not been used to make government spending efficient.

"There is no reason why government should not be as efficient as any good business."

'No coherent strategy'

Sir Philip was picked to look into government spending by the Prime Minister, David Cameron.

His cabinet is putting the final touches to a programme of deep cuts in public spending, due to be announced next week.

Sir Philip's report has focused on the procurement of goods and services such as computers, travel, print and office supplies and the management of the government's property portfolio.

Cabinet Office Minister Francis Maude said: "His [Sir Philip's] review shows that for too long there has been no coherent strategy to make government operate more efficiently.

"Every pound that we can take out of the cost of government is a pound we can protect on the front line. Our over-riding aim is to protect the quality of front-line services and to protect the jobs of dedicated public sector workers."

But Nick Seddon, the deputy director of the think tank Reform, which specialises in trying to think of better ways to deliver public services, said improving government efficiency was about more than money, it was also about the way the civil service operated.

Mr Seddon said top civil servants should be made accountable for the delivery of services and that their pay should reflect performance.

Further details of Sir Philip's findings will be revealed later on Monday when the full report will be published.

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