Sir Philip Green’s analysis of potential savings shows an apparent lack of understanding about public versus private sector change
Panacea Group CEO defends its public sector clients and cites inescapable bureaucracy as hampering the pace of cuts, ahead of the Comprehensive Spending Review
LONDON, 18 October 2010 – Panacea Group, a firm of efficiency consultants that works with the public sector, has written to David Cameron and Sir Philip Green in defence of its clients. It argues that the public sector has been misrepresented in the debate about public sector spending and points to legislation that is hampering the goal of making timely reductions in expenditure. Panacea’s CEO agrees that there is scope to make substantial savings, but contends that Sir Philip Green’s analysis of potential savings shows an apparent lack of understanding about public versus private sector change. It cites experience of working with public sector organisations through protracted legislative processes as evidence of the difficulties in effecting rapid savings.
Rachel Wynne, CEO of Panacea Group, said: “Sir Philip Green has shown the Government that the water of public finances is flowing faster than it should, but fails to recognise that the law prevents public bodies from quickly closing the tap. His report into public sector efficiencies is laudable, but flawed. Echoed by braying private sector bosses, it would seem to confirm glib suspicions that the public sector is universally witless about the money it spends. We agree with Sir Philip that the public sector is paying more for some goods and services than it should, but it would be foolhardy to think that public sector managers are clueless about this situation.
“The truth is that while our clients in the pubic sector are enterprising and proactive in seeking savings, they are stymied by well-intentioned yet highly complex bureaucracy. Many of our public sector clients’ efforts to make cost savings are hindered by the processes they have to follow and similar obligations make it difficult for them to speak out on this matter. The Government must accept that the laws to which the public sector is subject will severely delay the pace of cost savings ordered by the Comprehensive Spending Review.”
Ms. Wynne explains that the procurement law dictates that much of public sector spending has to be considered in terms of the aggregated value of each category of work which an organisation anticipates commissioning over a contract period (typically 3 years). If this is forecast to exceed set thresholds then a public body is obliged to advertise the work in official EU journals. They must accept tenders from anywhere within the EU and follow a procurement process involving pre-qualification of respondents through a detailed tender process which can include several stages. Evaluation at every stage involves representatives from commissioning departments, service users, procurement department and usually finance and legal officers. The public body has to publish its decision and details of the selected supplier(s) in the EU journals and must allow a set “cooling-off period” to elapse before placing contracts. Only then can they approach the new supplier(s) to provide the specified services. Once contracts are placed the public body has to ensure that all chosen suppliers have equal opportunity to compete for each piece of work which falls within the relevant category of services. This is time-consuming for the public body and costly for the suppliers, which is reflected in the prices paid by the public sector for much of their work. Panacea’s role is the provision of software that manages this process to maximise its efficiency and cut costs for all parties.
“In the many cases of small cost savings, this process means that the cost of making a change can be greater than the original saving. The reasons for or against the procurement legislation that demands this can be debated, but the rules as they stand cannot be ignored and this needs to be understood by those in power,” said Ms. Wynne.
Panacea Group works with councils and other public sector clients to identify and effect significant cost savings within their contractual obligations. Haringey Council used its skills and software and was delighted with the results. Lesley Gordon, Head of Marketing for Haringey Council, said: “With Panacea’s software, Haringey has been able to cut over £1m of costs for the Council without affecting our front line services.” Other councils that have benefitted from Panacea’s expertise include Camden Council, which has cut design and print costs by 48% since 2005, and the Royal Borough of Kensington and Chelsea, which also cites significant savings using Panacea software to manage all their printing requirements.
About Panacea Group
Panacea Group is made up of Panacea Design and Print Solutions Ltd and Panacea Software Ltd, which together offer consultancy services and project management software for design and print management that secures genuine efficiencies and cost savings for its clients. The Group produces award-winning targeted publications, e-communications, on-line advertising, animation and interactive learning tools, all delivered through a personal, tailor-made approach.
James Ollerenshaw at Curzon PR
+44 (0)7834 196817, email@example.com
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