What if Britain were run by Sir Philip Green?
The retailer says he knows how to slash Government waste. But why stop there? Andy McSmith imagines a state run on his ideas
Tuesday 12 October 2010
So Sir Philip Green, the billionaire boss of Bhs, Topshop and other familiar high street names, has supplied the Government with advice on how to make millions of pounds of the fabled "efficiencysavings".
His basic message is simple. As the biggest customer in the market, with an AAA credit rating, the Government has vast financial clout – but it doesn't use it as ruthlessly as Sir Philip would if he was running it as a business.
He recommends the creation of a new super-agency to do all the Government's wheeler-dealing. Every time a public information leaflet is ready to go to press, or a civil servant needs a hotel room booked, a central team of hard-nosed specialists would drive a bargain with the printer orhotelier.
But why stop there? Sir Philip has risen from humble origins to become one of the richest menin the country by taking overinefficiently run businessesand turning them round. Perhaps there are other lessons theCoalition could learn from this man's career.
One of the greatest constraints on government is elected politicians' constant need to defer to public opinion, as last week's reaction to the announced cuts in child benefit demonstrated. Sir Philip has had to deal with similar problems in his business career. Eighteen years ago, when he was plain Mr Green, he was in charge of a publicly quoted company called Amber Day. He was accused of running it as a one-man operation in a way that kept shareholders out of the picture. Some major shareholders pulled out, causing the value of the company to drop, and when profits were less than forecast, the board ousted (and paid off) Mr Green.
Since that experience, Sir Philip has avoided being sucked into this shareholder democracy. He has stuck with private companies, where he and his accountants can do what they believe is best without worrying how shareholders might react. The lesson for government is too obvious to need spelling out:get the voters off your back. Instead of the fixed-term parliaments and fewer MPs that the Coalition is introducing, it would be far more efficient and cost-effective to have no parliament and no MPs at all.
That would have the added benefit of making redundant all the ministers, press officers, PR consultants and the rest, who are hired to explain government policy to outsiders. Insofar as it is necessary to publicise what the Government is doing, let celebrities do it. Kate Moss, with whom Sir Philip has worked so long and so well, is almost as old as George Osborne, and much more photogenic. She could be the public face of the Government.
Yet it is a sad fact that no matter how cheap and efficientgovernment becomes, there willbe people who continue to carpand complain. Sir Philip's report highlights how the Government spends billions on telephones. Those phones could be put to use. People who criticise could be rung up out of the blue and shouted at in vernacular language that includes generous use of a word beginning with "f".
And when dealing with major opponents, such as Ed Miliband, David Cameron could study the example of how Sir Philip conducted his personal relationship with Sir Stuart Rose, the retailer who thwarted Sir Philip's attempt to take over Marks & Spencer. As Sir Stuart recalled: "It did get quite physical one morning on the pavement outside Baker Street. He didn't actually smack me but there was some vigorous grasping of the lapels."
Outsourcing has proved to be an immense cost-saver in Sir Philip's business empire, and should be applied more thoroughly across government departments. A question that the Education Secretary, Michael Gove, needs to address is whether state schools actually need a teacher in the classroom. Sir Philip emphasises how conference calling can reduce civil service costs, but omits to point out how much cheaper it would be if all lessons in state comprehensives were conducted by conference call by teachers based in low-wage economies in South-east Asia.
Do we need properly paid and highly trained British troops to fight our wars for us? Why can't the Ministry of Defence follow the lead taken recently by Suffolk County Council, and shed all its direct workforce apart from a handful of head office officials who hire troops and equipment when needed from the cheapest available sources? Hiring foreign mercenaries is a practice as old as history.
Obesity is a drain on the public purse. It costs more to employ a fat civil servant than a thin one, because the fat ones need sturdier chairs, use more electricity when travelling in lifts, and so on. It is also well known that benefit claimants spend a greater proportion of their income on food than do most people, from which it follows that if they ate less, they could get by on lower benefits.
This is surely an argument for a publicity campaign, fronted by Fearne Cotton, requiring everyone in public service, especially those working in benefit offices, to wear those popular "Love My Bones" T-shirts from Topshop. That would get across the message that a bit more anorexia could be a saving for the taxpayer. As Kate Moss once said: "Nothing tastes as good as skinny feels."
But actually these are details. Let's think really big. Let's ask the most fundamental question of all: why should the Government spend any money on anything?
The reason that the Government has to meet the cost of defence, health, education etc in the UK is that it is itself UK-based and therefore has a responsibility for the welfare of those who live here. But were it to transfer itself for legal purposes to a foreign jurisdiction, some little tax haven somewhere, surely it could continue to receive tax revenue whilst maintaining that, as a foreign entity, it is not responsible for contributing to the cost of UK public services. That £149bn of government debt would disappear in no time.
If David Cameron needs advice on how this can be done, Sir Philip's wife, Cristina, can help. She is in Monaco, looking after their untaxed billions.
There is no such thing as a painless efficiency saving
Philip Green's prescription for saving money
Problem: 71,000 civil servants have permission to spend £1,000 a month on everything from computers to stationery and travel without authorisation. One department paid £73 for a box of paper while another paid just £4.
Solution: All transactions must have prior authorisation and most purchasing should be done centrally through one contract at the cheapest price,imposing the Government's terms on suppliers.
Problem: Public sector property (excluding the Ministry of Defence and the NHS) occupies 2 billion square feet and costs the taxpayer £12.4bn a year. One government agency took out a 15-year lease on a building that was 30 per cent larger than it needed despite alternative premises being available nearby for £15m less.
Solution: Government property should be managed centrally. Property experts should be brought in to reduce space occupied and rent paid.
Problem: Budgets are only reviewed at the highest level and rarely against performance targets. Departments are not incentivised to spend less than the cash budgeted.
Solution: A team of three or four people, with financial and commercial expertise, should review departmental spending with an emphasis on efficiency and accountability. A quarterly review process, including spend to date and forecast, should be submitted to the centre, detailing spend against budget.
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