Tuesday, 31 January 2012

On bankers' bonuses, MP expenses and GPS.

Few of us will have missed the furore over Hester’s bonus. He is well paid and recognised by some as doing a good job.  Some of the outrage seems to be driven by the morality of rewarding a banker while SMEs struggle to gain banks favour and access credit.  Nevertheless he decided to forgo his bonus.  There appeared to have been some stirring of his moral compass– his GPS.

Some of the pressure on Hester came from politicians.  To some politicians it was immoral to accept such a bonus while many are suffering as a result of the global financial crisis.  It was also viewed as particularly immoral since RBS is one of the banks indebted to the government for its survival. To some politicians it appeared
RBS needed to reset its moral compass – its GPS.

Yet it only seems a short time since politicians were being criticised about their perceived abuse of the expenses system and being out of touch with the plight of citizens.  They were believed to have lost their moral compass – their GPS.

In this blog we’ve previously discussed the Government’s view that there is a perceived bias against UK business by public sector procurement.  The government suggest a need to reset the public procurement GPS so the UK businesses get a fair crack of the whip

Against this background, I was disappointed that the Government’s GPS seems to have become disorientated and lost its way having an adverse impact on SMEs.

What do I mean?  I’m referring to that fact that the government have an express intention to support SMEs and even claimed to be encouraging SMEs to bid for work, particularly the recent GPS management consultancy framework.

But what is the reality?  The reality is I have heard from SMEs that the route map to successful inclusion on the GPS framework is so onerous that they have concluded they cannot embark upon that journey. 
GPS have chosen to place unnecessary obstructions in the way that add cost and restrict access to SMEs, for example, required certification, formal organisational structures for collectives, case study evidence of contracts over £100k completed in the last three years, and excessive insurance cover. 
What has been the impact?  I am aware of at least 15 SMEs who have decided to withdraw from the GPS process. 
Who loses?  Clearly the SMEs lose the opportunity of bidding.  SME staff potentially lose jobs.  If any of those SMEs go bust GPS face the risk of being perceived as no more encouraging to SMEs than the banks. Public sector lose as they will not have access to some potential providers.  GPS lose credibility. Politicians find their SME rhetoric has been compromised.    
Could this have been different?  Yes, very simply, GPS could have done what navigators refer to triangulation – merely checking their position against a few certain positions.  Why didn’t GPS test their approach for fit with the objective of encouraging SMEs. While it's unlikely that GPS will retrace their steps and reset their compass, hopefully others will choose a less cumbersome route.

1 comment:

  1. The fundamental flaw with many public sector buyers is they do not understand the dynamics of business. There is too much 'safety first' and avoiding any form of risk, ignoring the fact that innovation only comes when organisations leave their comfort zones. With consultancy it is a bit like the old 'no one ever got fired for hiring IBM' of days gone by. Perhaps they should have been fired?