Saving Money

Just recently I had to purchase a new hob. It was the result of an insurance claim and the insurers provided me with a voucher to use at the same store it had been purchased from. I called the local store. They didn’t have the item in stock but confirmed it could be ordered and would be £500.

I was online at the time but couldn’t find the product on their website. The helpful salesman in the store directed me to the page and there it was. The odd thing was the online price was £400. As you would expect I terminated the calI and decided to buy it online. This was thwarted because the website had no facility to allow me to use my voucher.

Just in case I was missing something on the website I gave the main sales number a call. They confirmed my fears about using the voucher on the website. Feeling like I was being had over a barrel I was about to give up when the helpful salesperson said she could take the order over the telephone and arrange delivery for £5. She went further to say she could also honour the online price. The deal was done and I got my hob £95 cheaper than in store.

I negotiated with the different departments of the same store. I could just as easily (if not tied by the voucher) walked down the road and bartered with the competition to meet or better the price. The point here is that checking out local prices and doing research will often lead to a cheaper price for the same product.

In the police and other public sector organisations our larger purchases are handled by a complicated tender process. This is to ensure that the public purse is protected and budget managers can’t be accused of feathering their favourite pockets and being unfair in the distribution of our funds. In theory this sounds logical and sensible.

The tendering process can be a local arrangement by one force or it could be a multi-force cooperation.

Many years ago I had a discussion with a Supt in charge of a sub-division. My traffic unit was based in his station and we needed to have some minor alterations to our office. He fully agreed with the proposal. I told him I didn’t think it would cost that much. He said he agreed and if he could use the local reputable builder down the road he could get it done for £200. He then went on to say that his hands were tied to a tender contract and the company he had to use would charge him about £1000. He was clearly frustrated about the situation and how he could better manage his budget without such restrictions.

During Operation Safeguard (housing HMP prisoners locked out of prison) we had an Inspector overseeing the operation. There were a number of items that needed purchasing. The Inspector regularly rang the national operation office to seek approval for purchases. After a little while he was reprimanded and asked to stop ringing. He was told that no authorisation was needed for any purchase ( I cannot remember the exact figure ) of under £400.

As a result of this information he ordered loads and loads of kit and food and equipment and every single bill was £399 or less. No questions were ever asked.

In the last few weeks I’ve conditionally cautioned a contractor for a theft from our HQ. The item was left on display and in a typically opportunistic manner he stole it. The officer discussed the case with me and said the item was worth £75. He showed me a photo and I laughed. “£75! That can be worth no more than £40”.

The officer was happy to confirm that the item was available from reputable online suppliers for £35. He had queried the cost with the procurement people and they confirmed that we had bought it at £75. Further to that we had ordered 100 of them. So the total order was £7500. The reason it was so much was because the supplier was a tender winner, had put low prices in to secure the contract and then increased the prices massively once we were tied in.

If not tied in to such a crazy process we would be free to seek the best deal. I’m confident that the supplier offering the item for £35 would be able to negotiate a bulk purchase discount. To be conservative lets imagine they offer them at a unit price of £30. The toal saving would be £3500.

In these times of austerity forces around the country are being stretched to find savings across every area. Staff are being made redundant, officers are being retired and not replaced. Cuts are biting deep into the core function we provide. Yet every force in the country is haemorrhaging money whilst tied into this archaic and ridiculous tender process where the only winner is the contract holder.

It’s about time the Government and the Home Secretary opened their eyes and started to deal with this financial situation with logical common sense. At the moment they are meddling with things they think they understand and are ignoring those who know better. The ones who will suffer are the officers, the staff and more importantly the members of the public that we will, through no fault if our own, let down.

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5 thoughts on “Saving Money”

  1. The MOD has had the same problems, in the Royal Navy we often used to ask just why certain spare parts were so ridiculously expensive compared to the same items at Maplins.

  2. Drat clicked before adding that this was another great blog post of yours, and that as far as cost savings go this is a system that is being worked and needs an overhaul, or a regular system of checks and inspections to ensure that it works for the force and honest suppliers rather than the spivs.

  3. The tender process is part of eu regs however having done extensive training in the public sector it occurs to me that if there was some central procurement for say handcuffs or asps or if uniforms were standardised across the country the cost savings would be huge. Yes some civilian jobs would be lost however as a member of the public I’d rather the budget was spent on a police officer on the frontline than a civvie
    who buys shirts or even on more useful support for the officers like hr. Whilst we’re on this why are they pcs, supts etc procuring anything? Procurement is a specialism like accountancy and recruiting specialists to do this would be more efficient in time and money. Great blog. Thank you

  4. I’m right with you there. My employer refuses to get into such contracts, and always goes looking for the best price every single time we buy something that doesn’t absolutely have to be in a contract (and when we do have a contract, which is usually for IT-related stuff, the head of IT is a formidable negotiator and always ensures the contract does not allow for sneaky price increases during its lifetime).

    Actually, shall I just send my boss to work for you guys for a while?

  5. Having worked for some large private sector organisations, I can confirm the problem is just as bad there.
    As well as uncompetitive prices, we had to do endless form filling, and get every purchase – no matter how small – approved by a chain of line managers. Oh, and the ordering system was hideously antiquated.

    It always makes be laugh when I hear people criticizing the public sector – because large private firms are just as bad.

    T
    PS Great blog. Some very thought provoking posts.

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