Another day, another salvo against public waste from the communities secretary, who seems to be relishing his assault on needless state spending. Today he claimed in a speech that councils were overpaying invoices to the tune of £147m a year – based on an estimate by Experian.
“£147m would pay the wages of nearly nine thousand care workers. And more importantly, it betrays a particular attitude. A lack of respect towards public money.”
I’ve had a read of the Experian report, or at least the eight-page PowerPoint presentation of its results. The credit checking group carried out research on 11 local authorities, looking for invoices that had been paid twice. Its research found that there was 0.16 per cent duplication for “a well-run local authority”, equating to £600,000 of waste from an authority with a £400m budget. Experian then presumes that the figure would be “much higher” for many councils. However, it has used the 0.16 per cent figure to reach its total £147m estimate of “recoverable monies” from the sector as a whole.
The only reason one might be slightly sceptical is that Experian is trying to sell a “solution” (Procurement Insight Solutions) to councils which involves a duplicate payment check. It says that this system saved one large city council £500,000 in potential duplicates and a county council £2.4m.
But you do have to wonder whether 11 councils are a big enough sample to take as representative of every local authority in Britain.
Meanwhile I asked an Experian spokesman whether the cost of the system would be less than the supposed £147m it would save. The answer is yes, certainly, although the company has not done that particular calculation.