How to cut procurement costs in the public sector

Thanks to Simon Beechinor for drawing my attention to this article on the Telegraph website, which talks about some of the pitfalls the public sector should try to avoid in delivering the £6.3bn spending cuts the government has pledged for 2010/11. Interestingly, as Simon points out on his own blog, Auditel’s Total Cost of Purchase model addresses and provides solutions for all the key issues raised in the article. Mr Maude and Mr Alexander, we await your call!

The real cost of packaging waste

One of our consultants, Terry Crouch, has been doing some waste management work for a client recently and as a result came across an article about another local company that fell foul of the Producer Responsibility Obligations (Packaging Waste) Regulations 2007 following a routine Environment Agency visit. These oblige any company with an annual turnover in excess of £2 million and handling more than 50 tonnes of wood, aluminium, steel, cardboard or plastic packaging waste a year to register with the Enviroment Agency or an approved compliance scheme. Each year, they must also provide evidence of payment for recovery and recycling of a specified proportion of their packaging.  And the real cost of these obligations? Well, this company was fined a total of £23,000 for not meeting them! Of course, Terry’s client won’t have this problem as he’ll ensure all the paperwork and bureacracy is in order as an integral part of his management service.

BT to raise call charges by 10%

According to an article on the BBC website today, BT are planning to increase call charges by 10% and its monthly line rental by 50p from the beginning of October. The cost of connecting a call will go up by a penny from 9.9p to 10.9p and the daytime rate by half a penny from 5.9p to 6.4p a minute.

As you might expect, however there are a of raft ways in which BT customers can avoid or minimise these increases, for example by signing up to longer-term contracts, moving to bundled inclusive packages, paying annually rather than quarterly or monthly, or opting to receive their bills electronically. Which is all well and good if you’ve got the time and knowledge to obectively review your bills and work out which are the best options for your organisation, including whether to move to an alternative supplier.  Auditel clients who use BT will, of course, be contacted by their consultants as a matter of course to discuss recommendations for ensuring these price rises don’t impact on them.

Proudly supporting England’s elite athletes

We’re delighted to announce that Auditel has become an ‘Official Friend‘ of the England Commonwealth Games Team, ‘We are England‘. Hundreds of athletes from 17 sports disciplines will be heading to Delhi for the Games, which run 3rd – 14th October this year, and for all of them this will be the culmination of thousands of hours of practice, commitment and dedication. We wish every single one of them the very best of luck and look forward to celebrating and sharing their triumphs in October.

If you’d like to know more about how the team’s preparations are coming along, and to get regular updates in the lead up to the Games, send an email to newsletter@auditel.co.uk quoting the reference ‘Commonwealth Games’.

Are energy issues a board level concern in your organisation?

Many thanks to our colleague David Gray for letting us know about a series of podcasts NPower has put together in conjunction with the Major Energy Users Council (MEUC), aimed at helping organisations better understand four key energy issues. The topics covered are: ‘Security of Supply’, ‘Managing Energy purchasing’, ‘Managing Carbon Reduction’ and ‘Renewables’, all of which have significant cost implications and should be incorporated into business strategy.

As Wayne Mitchell, head of corporate sales at npower says,  “As staff issues have risen up the corporate agenda HR directors have taken a seat on the board and some are now even taking the step to appoint IT directors, but energy isn’t always a board priority.  We believe that time has come – energy now brings with it financial, carbon, operational and even reputational considerations that deserve board level attention, but we know that it’s not always clear exactly how such considerations affect the running of a business.”

Many organisations, large and small, already have bitter experience of rising energy costs over the last few years and, as we’ve seen from recent posts, energy companies are busy reviewing accounts to see if they can raise (in some cases very significant) back bills. Add to this the new burden of Carbon Reduction Commitment (CRC) compliance for organisations with half-hourly supplies, energy usage management, renewable and green energy issues and it’s not hard to see why so many organisations outsource responsibility for managing this complex and time-consuming business cost area to experts like Auditel.

A marathon effort to raise funds for BLESMA

Journeys end: James (left) and Thane (right) complete their epic challenge

You may remember that a few weeks ago I posted a blog about James Bury’s plan to walk and run the equivalent of four marathons to raise money for his client, BLESMA (British Limbless Ex-Servicemen’s Association). Well, I’m glad to report that despite choosing one of the hottest weekends of the year James and his friend, Thane Hall, successfully completed this gruelling challenge well within the 48-hour time they’d set themselves, completing the 102.5-mile, Southdowns Way between Winchester and Eastbourne in just 39 hours.

James says, “ Apart from some wear and tear, I feel great, despite having to stand on the train back to Winchester! A big thank you to everyone who’s supported us and BLESMA – that support made all the difference when it looked like it might be difficult to finish. Also a very special thanks to Thane for coming up with the idea, and for proving to be a faultless navigator even at night after 70 miles non-stop! BLESMA is an amazing charity that supports those who have suffered serious injury serving their country. For every death reported in Iraq and Afghanistan, there are probably two or three very seriously wounded, who are almost always young people with their whole lives ahead of them. While they can provide plenty of courage and determination they do need specialist help, encouragement and opportunities to rebuild their lives. We’ve raised £2,000 in sponsorship so far, which I’m really thrilled about as every donation to BLESMA, however modest, is going to a very deserving cause.”

Watch your back bills

Talking to a couple of our consultants this week it’s becoming clear that all the major energy companies are keen to claw in every penny they can in these hard times, which is why they have set up teams whose remit is to go back over business energy bills for up to 6 years. We’ve seen a number of cases in which these teams are generating new bills for old, and claiming tens of thousands of pounds from their business clients. The good news is that these bills are frequently wrong for a wide range of reasons so, if you know what you’re doing, you can get them reduced or even cancelled. At Auditel, of course, we do know what we’re doing and have good contacts and relationships with all the major energy suppliers so have had great results for our clients caught in this trap.

For example, one of our clients, the owner of luxury holiday home parks in north Wales, received a £57,000 back bill for one site dating back to 2004, when they acquired it. A thorough investigation revealed a number of billing and administration errors which, when coupled with some tough face-to-face negotiation with the supplier,  brought the invoice down to £21,000, an overall reduction of 63%. Another, food distribution, client received a final bill for a site they had moved out of 15 months previously. The bill was demanding just over £32,000 based on the fact that the energy company had misread the meter for the 5 years our client was in the building. However, after much  time-consuming negotiation we were able to halve this demand.

It pays to check your invoices

One of Consultants, Denis Sprague, was back with us for some continuing professional development training this week and while catching up on general news he happened to mention a £1,073 rebate on a gas overcharge he’s just identified for a small client. This might not seem too significant, but for an organisation that usually spends about £1,903 per year on their gas supply it could have made a big difference to their budgeting for the year. The error occurred when a new meter was fitted at the client’s premises and the gas supplier took an incorrect reading – or rather made an incorrect assumption from their reading – which made it look as though they had used twice as much gas as they actually had. As is the case in many companies, the client themselves hadn’t picked this up – after all, it’s not a huge amount and they didn’t have the time, internal resource or expertise to check every detail on every invoice every month. Of course, now they have an Auditel consultant working, essentially, as another member of their management team, they have got all of these things and a rebate from the gas supplier. What’s more, because Denis will be checking all their invoices going forward, they also have peace of mind that if it happens again, there’s no chance of it slipping through the net unnoticed.

EU cap data roaming charges

New EU legislation came into force today to cap data wholesale roaming charges within Europe.  The new cap limits the amount operators can charge each other to carry customer’s data traffic while abroad, lowering the price from €1 to €0.80 per megabyte. In addition, all carriers will now have to stop providing data roaming services when users have racked up a total of €50 in charges, the idea being to protect customers from ‘bill shock’ when they return home.

The EU’s digital agenda commissioner, Neelie Kroes, is keen to promote more competition in EU roaming charges, which operators tend to set very close to the legal permitted maximums. These maximum charges are currently under review and the Commission will provide more information about how it intends to ensure increased competition when the results of this review are published in mid-2011.

Source: ZDNet.co.uk

Free cost management advice for small business owners in Birmingham

Are you a member of the Birmingham Chamber of Commerce employing between 1 and 15 people? If so, you could benefit from an informal one-to-one Business Cost Health Clinic with Auditel consultant, Adrian Burton. The aim of the session would be to discuss any concerns you have about managing your organisation’s overheads and you will be encouraged to bring copies of recent bills or contracts so your discussions can be specific rather than generic.

Adrian has been working with Birmingham Chamber of Commerce members for over a year now and savings he has made include £14,000 and £3,500 water rebates for a haulage company and a charity respectively and further savings of £10,000 per year on food purchasing for the same charity. He also contributes to the Chamber’s monthly newsletter, ‘Chamber Link’ as well as being a regular speaker at every New Members Day.

Adrian’s invaluable Business Health Clinic sessions will take place on 14th September 2010, 9.30am – 1.00pm and are open to members from any business sector. However, there will only be 20 session available so you are advised to book early by contacting Adrian on either 01922 411000 or at adrian.burton@auditel.co.uk