£9m to £58.7m doesn't sound like a marginal increase. Is this how Government sums usually work, as it would explain a lot.
Government procurement body the Crown Commercial Service is to start hiking up the amount it charges suppliers to sell stuff to the public sector. CCS already pockets fees from government frameworks – last year taking a cut of £72m from the £15bn total managed spend it facilitated. However, it will now more heavily rely on …
What a surprise! So the suppliers will increase their prices to reflect their increases in costs ... which will get passed straight back to the departments. How is this round-a-bout of fee's on badly negotiated deals going to help anyone? Rather than these ridiculously expensive national frameworks that government bodies are forced to use, more leeway should be given to finding the best deal. Rather than trying to get good value, it just looks like CCS is augmenting a management pay hike!
Its simple really, its all about accounting. They can claim that they have saved departments money because they don't charge them any more for it. This makes it look like the government is spending less money running things, as the new cost is simply a purchase cost and not an ongoing internal cost.
Its all about making the government look like they're saving money...
I can't see the CCS value from either side of the equation. Whichever way you look at this, it's just a middleman that makes procurement more expensive than it should be - and guess who eventually pays for all that? Yes, you, dear tax payer.
If the CCS wants to blackmail business in charging a tithe for its service, it should be made possible for providers and government departments to go direct. That way, the CCS has to compete for "business" just like the rest of us, and if it doesn't deliver value, well, that's what the Americans tell us that capitalism is good for..
CCS save us quite a lot of money actually. They create frameworks, where pricing is set at a certain level. One example of this is in the realm of photocopiers. Comparing standard pricing with CCS framework suppliers shows quite a big difference. Crescent consortium is another similar organisation that does the same thing.
Don't underestimate the savings from these sorts of frameworks.
I've worked in a range of big firms and have come up against Procurement time and again. Not once have they ever been cheap, fast, or savvy. To a team, they have been slow (three months for a simple cable), expensive (it was cheaper to pop out to Maplins) and often either ridiculously high-spec or ridiculously and suspiciously shoddy. The concept that they would bring negotiated prices and good deals to the company has, in my experience, never been achieved.
Incompetence? Bungs? The result is the same. I know that manager going out and buying their own stuff is also a nightmare, but at least they have something now, when they need it, at a price they've chosen to pay.
I've worked in a range of big firms and have come up against Procurement time and again. Not once have they ever been cheap, fast, or savvy
I worked for a large organisation a few years back where all procurement had to go by way of an approved suppliers list. Of course, the cables I wanted wren't made by anyone on that list.
Now a mate of mine runs a cable harness construction business. And he's on the approved list. So I emailed him details of the parts I wanted, and he emailed back his markup. And so the parts I wanted were bought from the vendor I had found by way of a third party, just so that we could keep on saving that money by using an approved supplier list...
Rather than paying CCS's costs directly, it means that every £1 of income will be marked up by 30% to cover the administration charge or it will put the Public Sector off using CCS - something we have seen more and more of in the last year.
Waht happens if it doesn't raise enough money to cover costs? I can't see CCS going bust. Yes, it will be funded centrally.
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