Archive for the ‘Sir Philip Green’ Category

Sir Philip Green Efficiency Review

Mercredi, octobre 13th, 2010

The Coalition Government asked Sir Philip Green to examine and report back his findings and recommendations on how its central (Whitehall) departments spend money. His Efficiency Review has concluded in summary that the Government is failing to leverage both its credit rating and its purchasing and property (largest tenant/owner in the Country) scale to full advantage. This reflects inefficiency and waste, mainly due to very poor data (e.g. great difficulty in establishing actual transport costs) and process (e.g. lack of a centralised approach to purchasing, leading to significant price variations for common items across departments and multiple contracts with some major suppliers).
Implicitly acknowledging the political connotations of his report, Sir Philip has subsequently emphasised to the media that he was not looking for job cuts, just how the existing personnel in central government could work better with less. In addition, no total value has been placed on the actual amount of waste identified and/or the possible total saving, although practical examples sprinkle the report such as the 400,000 hotel nights spent in London for central government with a suggested 50% saving from video conferencing and other such solutions. He also questioned whether it made commercial sense to pay suppliers in 5 days (a relic from the last Labour government to help its suppliers through the recession), when the norm is 30 days or more in the private sector. Labour has already countered that government is complex and that more centralisation e.g. of government purchasing, will lead to more bureaucracy and expense and this also runs counter to the Big Society government idea of more decentralisation to local level to reduce cost.
Total central government spend in 2009/10 is put at £670 billion consisting of:
• Benefit & Grants………………………………………..270 (40.3%)
• Procurement (e.g. IT, Travel, Consulting)……166 (24.8%)
• Pay…………………………………………………………..164 (24.5%)
• Property (including running costs)………………..25 (3.7%)
• Other………………………………………………………….45 (6.7%)
Procurement at almost 25% of total spend in Whitehall is then identified as an area where the whole public sector would benefit from a centralised procurement process.
However, in asking the colourful Sir Philip to carry out this efficiency review the government has taken the risk that the media impact of his report will far outweigh the negative aspects of his personal tax affairs. That said, if it was his own business, Sir Philip would also have ensured that any such report by his own staff would not only have quantified the total waste and potential saving but also the required action plan and resources required to achieve an actual target amount.

Sir Philip Green

Vendredi, août 20th, 2010

A division has emerged in the coalition over the appointment by David Cameron of Sir Philip Green as an unpaid financial trouble-shooter, tasked with making recommendations on how to make the public sector more efficient. Lib Dem MPs who campaigned against tax avoidance in the election are demanding a review of the tax arrangements of this businessman who has avoided tax on the personal fortune made from his business empire by handing ownership to his wife, now living in the tax haven of Monaco and legally avoiding tax on dividends from his companies.
Under pressure from his MPs, Nick Clegg has said that they are looking at the case for an anti-avoidance rule to ensure that wealthy individuals pay their fair share of tax. Lib Dem MPs add that tax avoidance costs the Country far more than benefit fraud, the latter of such major concern to the Conservatives.
In defence of Sir Philip his companies are registered to pay tax in the UK, his large number of employees all pay tax and his personal tax avoidance scheme via his wife is not illegal. He and his team will also only be making recommendations and he will not be in government making laws. He is unfortunately like Lord Ashcroft a prominent example of the flexibility that wealthy individuals have to minimise their tax exposure under the current UK
tax laws. However, the Coalition agreement also commits the government to make every effort to tackle tax avoidance including detailed development of Liberal Democrat proposals, although in principle no decision has been taken on whether to support a general rule outlawing tax avoidance.
It is good that the Coalition is pulling in such experience and talent to help sort out the Country and also moving away from the dogmatic politics of yesterday by inviting others such as Frank Field and Alan Milburn from the Labour party to provide their expertise e.g. on respectively poverty and social mobility. However, a further question has now been raised on the judgement of David Cameron with the resignation of David Rowland the new Conservative party treasurer, who was only appointed in June having returned from tax exile last year and given £2.7 million to the Conservative election campaign. Apparently Mr Cameron ignored warnings that he was not the man for the job. Whether the internal strains within the Coalition from the appointment of Sir Philip Green will prove to be worth it should be judged together with the practical effectiveness of the actual recommendations resulting from the efforts of him and his team.