OPINION: Back in the 1980s there was an expose of hugely inflated costs from suppliers to the US military, for example $37 screws, a $7,622 coffee maker, $640 toilet seats. Even thirty years on, those costs are eye-watering.
The over-charging was part of a cosy relationship between industry and the US government, with defence contractor-funded politicians in Congress not scrutinizing budgets as closely as they might.
Now I’m not for a moment suggesting that this happens today, either in the US Defense Department or Brighton and Hove City Council. However there has historically been a perception that public funds are limitless, and public services have been a “soft touch” for any contractor to make an additional profit from the huge pot of local government money.
This belief has been stoked as much by those on the right as those on the left. By constantly repeating the mantra that local government overspends, some contractors have gone into the procurement process thinking that they don’t necessarily have to be as tight on their overheads as they would when dealing with the private sector.
Let me send out a very clear message today. If local government ever had a bottomless pot of cash, that isn’t the case now. Within the next few years that pot will be empty. By 2020, the council will have had to make savings of over £160 million since the coalition government came to power in 2010.
The government’s grant funding for councils will all but disappear by that point, money we currently spend on providing your services.
If there was ever a time when contracts were just nodded through, when costs and quality of work went unmonitored, and renewal was a matter of course that time has ended. It doesn’t matter how environmentally sound, or socially worthy your project or product is, the numbers have to stack up.
It doesn’t matter if “it has always been done this way” or “this is the normal cost for the public sector”, that will no longer wash. We will use our buying power to promote Social Value, to support local businesses and encourage the payment of the Brighton and Hove Living Wage, but businesses will need to be rigorous in their approach.
We have to drive value from every penny we spend in order to try and maintain as much in the way of local services as we can, faced with large-scale Government cuts to our funding.
We will put every service we buy in under the microscope via our Procurement Board, ensuring we get the very best value for money from suppliers. We will scrutinize every contract we have using our commercial staff with audit committee oversight to make sure that there is no overcharging, double charging, waste or excess.
Where we uncover any financial malpractice or waste we will expose it, and hold people to account. We will bring forward the re-tendering process if necessary and we will place the same, if not stricter, demands on contractors on behalf of you as taxpayers as the private sector would on behalf of their shareholders.
Whatever the way it may have been done in the past, this is the way it will be done now, that is the commitment of my administration and our senior officers to you our residents. We will get the best services for you that we can, making best use of the money we have, your money.
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