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Government waste: why they squander so much money

Government waste: why they squander so much money.

Here is just one of the many reasons your tax pound and mine is being squandered, and will continue to be wasted.

Imagine that you have developed a highly effective way in which governments and local authorities (GLAs)  can

Save a huge amount of money

Deliver a much better outcome for the same money

Obviate the need for expensive processes

When your method is tested, it is clear how much value it can add, what good it will do, how many more people it can help.

You approach the GLAs. The leaders agree that what you have is hugely useful! It is exactly what they have hoped for; what their clients/users/staff need, and it delivers more for less money than was previously possible. “Thank you, thank you!”

All looks great; it is a win-win-win situation.

Or is it?

It is until the following entirely routine situation unfolds.

The GLAs are legally obliged to put out to tender the need you can address.

A quick aside. There are very good reasons that GLAs are required to invite as many parties as possible to tender: to help prevent corruption and to ensure than public funds are used as effectively as possible. That, too, looks great. It looks like a win-win-win situation.

Or is it?

Let’s explore.

What happens when you put forward a proposal?

The GLAs will be very grateful. Why?

You have just given them the template that they can use to create an invitation to tender. Don’t expect any thanks, though.

In fact, you should expect to be heavily penalised.

Here’s the mechanism through which your penalties will be delivered.

When the tender goes out:

  1. Your competitors have just received FREE valuable intelligence on what is now possible.
  2. Your ideas are now in the hands of your competitors, thanks to you generously providing the tender template.
  3. People and companies who do not have the capacity to generate the original solutions that you have so expensively created, have just been handed the results of all your time and cash investment.
  4. Your expensively developed competitive advantage has just been wiped out.

If that does not appear very damaging, don’t worry, there is worse to come.

Now, as one of many people or companies tendering to have the honour of implementing your innovative methods or product, you are up against bargain basement suppliers who have invested nothing in research and development. They don’t need to; they just look at the invitation to tender documents and they have just saved themselves a fortune, at your expense.

You think that only applies to high value provision?

Think again. Here is the procurement policy for one GLA body.

Contact Value                    Action Required

Up to £500                           A single quotation

£501 to £5000                    A minimum of three quotes

£5001-£100,000                Invitation to quote advertised on the GLA’s e-tendering portal.

Of course, it is entirely (?) unclear as to why such procurement policies would deter efficiency, innovation and progress, after all, everyone wants to spend a fortune and years of their lives figuring out how to add value to GLAs and then give away those solutions for nothing. Careers advisors (?) even teach youngsters how to follow such fulfilling careers.

Companies are (?) lining up to give away their IP (intellectual property) to GLAs, and then join the race to be the lowest bidder to implement their innovations. Futures are built on such clever strategies!

If you wanted to know just one reason that there is such a dearth of innovation, progress, efficacy or efficiency in GLAs, you now know why.

If you ever wondered why top calibre people aren’t making their techniques and methods available to GLAs, now you know.

There is a vicious cycle at work here, which keeps GLAs as the least effective and most wasteful of all organisations.

Because innovators have an active disincentive to offer their methods to GLAs, the GLAs only ever get the lowest bidders, which means provision is delivered by those who have the lowest cost base, providing the same-old, same old.

Given that labour is the largest component of many companies’ cost, lowest cost base almost always means lowest skill base. The GLAs spend money on the lowest skill base, which almost never comes with the kind of innovative, value adding thinking that is going to add massive value. Which means that they are always destined to be the least effective and most wasteful of all organisations.

Alas, the procurement policies which are intended to prevent corruption, and get best value for money, inevitably, get worst value for money. The law of unintended consequences is proven yet again.

Imagine now that you had a solution to GLA waste and squander. Would you approach GLAs with your solution?

Eh, not while you have a brain in your head!

Why? Because the problem itself would prevent you making any return from your solutions. So, the problem continues. Those who have the ability to solve it have an active disincentive; it is smart for them to sit on their hands, or more usually, make the solution available to organisations that won’t penalise them for innovative thinking, and indeed will active reward such ability to add value.

Fortunately, the solution to GLA procurement waste is available, but until GLAs give those who have it, an incentive to implement it, the waste and squander will continue.