David Behrens: Public sector 'old boys club' costs us all dear

DAVID Cameron came to power promising to cut wasteful spending in the public sector. Here is where he should start.

Last week, the Yorkshire Post reported the curious case of Kirklees Council, which splashed out 130,000 for a set of traffic lights right outside the new driveway of a house its own officers had just approved.

Consequently, the lights had lain unused for two years and would, we were told, cost a further 30,000 to remove.

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While this can all be dismissed as a little local difficulty – another case of a bumbling local authority's left hand not knowing what its right hand was doing – the quoted figures go to the heart of what is wrong with the way central and local government spends our money.

Installing a set of traffic lights involves digging up some Tarmac, laying down electrical cables and erecting warning signs in compliance with some piece of red tape or other. Maybe some below-the-line planning effort, too. But 130 grand just for that? I know someone who'd do it for five.

And 30,000 to dig it all up again? It's half a day's work for two blokes: you do the maths.

This week, I am having some work done to an outbuilding at my house. It too will involve digging a trench and laying some cables, but the bill will run to four figures, not six. Why? Because as a mere householder I can use the free market to procure services at common sense, value for money rates.

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But that's not how it works in government. I know, because I spent three years watching it being done the hard way.

Here's the problem: if the government wants (as I did, on its behalf) to contract a company to build a website, it can't simply phone round for the cheapest quotes, nor approach experts it knows who would do a good job. Those people aren't on "the system".

They may be the best at what they do, but as far as the civil service procurement machine is concerned, they don't exist.

Instead, for my website commission, I had to write an "invitation to tender" and send it to the much larger and more costly companies on the approved list – a sort of governmental Argos catalogue of suppliers of everything from websites to Wellington boots. And, let me tell you: the contractors could see us coming a mile off.

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The system, I was told, was there to ensure the taxpayer got the best possible value for money. In truth, it did exactly the opposite.

True, it prevented (usually) renegade clerks from simply phoning their mates and divvying up the departmental business among themselves.

But transparency and probity has come at a fearsome cost. The forest of red tape in which the whole process is wrapped mitigates against all but the very fattest companies.

Smaller, more competitive, more local firms are deterred by cost and the immense and wholly unnecessary complexity.

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For them the catalogue is nothing more than an exclusive and cosy old boys club.

Take my case: in order to buy the services of the two web companies offering the best product and price, I was compelled to rope in a third company – one from the catalogue – whose role was to do nothing other than sub-contract the work to the original two firms in return for a 15 per cent mark-up.

Worse yet, this ill-formed consortium had then to compete against "serial contractors" from the catalogue in a bidding process which precluded me as the client from specifying that I wanted to run my website using the cheapest suitable software available. This would have been seen as discriminatory towards rival, premium-priced software.

I got my way, and my consortium got the contract, albeit at 15 per cent more than necessary.

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But in most similar negotiations in the central government agency for which I worked, the bigger, most expensive companies held sway.

They knew the system better, and they knew more about the work at hand than the civil servants doing the commissioning.

Those civil servants always took the safe option; it covered their backs better if the project went pear-shaped later on. And projects did go pear-shaped with depressing monotony; inevitable when the procurement system had prevented them from being specified properly in the first place.

It's that same system which prevents those traffic lights in Kirklees from being taken away for less than 30,000. The catalogue doesn't accommodate the cheaper options.

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It's a system that needs to change, but that can't happen until the

people doing the commissioning are changed.

The fetid world of public sector contracting desperately needs the

fresh air of free enterprise.

Sadly, it's a tall order and this time I don't know someone who'd do it for five grand. But if we don't start overhauling public spending now, we never will.

David Behrens is the Yorkshire Post's digital editor.