289. Why we need fewer civil servants

2010 we spent 3.6 billion a year on consultants. You know people reading our watch telling us the time civil service student is like an infinite war infinitely high infinitely wide every 10 billion pound we say if it's half a million junior university service is three million primary school places or when you run in a business and the civil services is fundamentally a business needs to have a strategy a vision a plan and then you've got to execute the plan you want to have the best talent in the right swim lanes to deliver them. What percentage of procurement as government purchase of goods and services a went to British companies and b went to smaller companies and how did that change on your watch? A great question. So government spends on public procurement 430 billion a year 430 billion. We're delighted to say that this year the rest is money is powered by octopus energy so we're joined by it's founder and CEO Greg Jackson. So Greg I heard that the prices of solar and home battery storage are falling so is it worth waiting before you invest in them? At first we never know what's going to happen to the future price of energy could go up or go down so I think when people try to do a really detailed payback calculation the problem is you don't really know what the alternative is but I don't know many people who have regretted getting these technologies because the one thing whenever you get them is it helps insulate you the against the volatility of the market prices and so as far as I can tell the vast majority of people who've made that decision are happy with that. Greg thank you very much now on with today's episode. Hello and welcome to the rest is money with me Steph McGuven. I'm with me Robert Pestan and what we want to find out today is is there a way to make the civil service more efficient cuts civil service numbers while simultaneously buying more from British companies particularly small British companies that would have this virtual effects of freeing up a ton of money for investment in public services but also stimulate growth. Yes and we've got the perfect guest for this we've got Stephen Kelly who for many years has ran several big name tech and software companies started his career oracle went on to become the CEO of Sage Group which is course one of the largest software companies in the UK and then he was brought into the public sector by David Cameron to improve efficiency try and bring down the number of civil servants cut the spending and essentially improve productivity in the civil service as well which he managed so we want to know how he did it he was our interview with Stephen Kelly. Stephen lovely to have you on the show now as we've just mentioned an introduction you were brought in by David Cameron to streamline the public sector what we want to know is we need that now so how did you do it what can we learn from you. Yeah and obviously very different times that was back in 2010 since 16 years ago and it was off the back of the credit crunch 2008 and then a whole period of what was termed austerity but with this effectively I think fundamentally the civil service can be massively improved and made a lot more efficient so that we deliver much better services to citizens and that was the whole mission so between George Osborne and Francis or David Cameron they determined that they should bring someone in probably from the private sector who's got a lot of operational experience and create a role called the first chief operating officer for the whole of the UK government 24 departments and that encompasses all things like IT commercial practices, procurement, digital services so the launch of things like Guffie UK as well as major projects so all the fun are probably of connecting for health and HS2 and Hickley Point and all these sort of things so it's a very wide range and anything touching taxpayer money would be effectively the responsibility this role working very collaboratively with the departments and I guess the headline numbers the civil service started in 2010 with 492,000 civil servants all you know very good people but then when I left it was 380,000 so over that period we actually had a smaller civil service by almost 120,000 and where did you leave? 2015 so that's more than 100 so about 120,000 reduction in just five years how much of that was essentially when people just left of their own accord not replacing them and how much of it was active management essentially saying you've got too many people here or these people aren't up to it and we're going to get rid of them it was probably probably about more than half or through natural wastage so terrible phrase but effectively people retiring people coming up to the end of the tenure people going back to the private sector and that was obviously a program put in place through HR to actually encourage some of that as well but then also there was some restructuring and some elements around the machinery government were modified to actually accelerate a more efficient government with anything you know you've got almost 500,000 people and the status quo takes over and obviously the culture up to that time particularly through the years of I guess the play is where the economy was growing fast typically the civil service was growing in the same sort of today tree with the economy so it was a kind of root and branch review a restructuring a reform program that was put in place but but a lot of the actual personal exits in the human story was done through network work again another terrible HR phase of natural nutrition but just ask on that you spent most of your life in the private sector and you know most private sector employers say to me that there's always a risk if you shrink numbers through natural wastage that essentially you keep the under-performance you keep the poor performing members of staff were you able to assess you know when you left whether the quality of the civil service was what it should be yes a great question I think I guess my experience of why did I take this on because that's the genesis I kind of grew up in the world of US technology and spontaneous with a startup company at the time called Oracle in the 80s and 90s and that was how to build global growth companies but then I had to do a number of restructures and again probably the US model was pretty focused and very pit on point in the UK when I came back to government my interest was could I actually apply the playbooks of what I learned in the US when I came back to the UK I did that in a public company called Microfocus and then the the intellectual challenge my curiosity was tweet by thinking could those same sort of business practices the tone of the top the strategies be employed in one of the oldest institutions in the world the British civil service and it was the case so coming directly back to a question it was the case that on on the sort of restriction and we called it the reform agenda was very focused on making sure the good people stuck around so a lot of obviously the process you know inevitably when you're losing colleagues and in the first couple of months actually there was a lot of you know retirement parties and leaving parties and all those sort of things it does set the tone within the company the culture and and very important to me is a vibrant culture within all the sort of responsibilities I've had so we had to actually personally put our arms around the shoulder of the most talented people and actually during a time of major change major restructuring it is a great time for opportunities people want to take it on more responsibility so the best people actually rose to the top it's interesting you said that because you're suggesting that people were then happy with the changes because you would think that them knowing you were coming to essentially get rid of people would create a negative atmosphere amongst people and yeah people would be thinking or he's the I don't know the grim reaper coming in to get rid of jobs so what you're saying is the it was kind of easy to implement then like nothing to do and you know nothing actually wow I've been in business for 45 years nothing that you build of substantial value is easy to do unless you win the lottery or something you know I don't do the lottery it is a lot of hard work I think the start point you're gonna have a vision for what Britain wanted to be so and then you've got to have a plan we had a very clear vision and we used to you know honestly with any institution particularly like people who have been in the civil service 20 30 years they become institutional and sometimes I hate to say this but in big companies it's the same they become saboteurs they they forget the enemies always on the outside and they start at picking kind of internal turf ice it's just crazy and what we sought to do was say actually the reason where you came through the you know the turnstiles at horse guards or caxton house was to improve public service you got that mission that zest for better public services servant citizens and we want to reconnect you to that and we want to actually eliminate all the wastage all the noise the bureaucracy and create efficiencies to allow you to do that and then what we did and we measured this and actually had the national world of office auditor and I sat in front of Margaret Holdscher the public council meeting make Helia I don't know half a dozen times to say we had to measure so number one we had a vision number two and that was a vision for Britain why it's important why we need to say money and then we connected it to real life stuff so we said every 10 billion pound we save is half a million junior nurses at risk of severe. It's three million primary school places. Yeah, it's like massive impact on the far services. And it gives the chance of the Eczekka huge latitude if we're making great savings in the civil service and public service. Number one, to improve the services. But most importantly, to actually give the chance of a latitude to invest in public services that we're all proud of. And that's the genesis of why we started in the civil service in the first place. You must have come up against resistance or from people because no matter how much you tell people, if we get rid of your job, that'll be a nurse or whatever. It's people care about themselves too. Yeah, definitely. Definitely. And before I joined, this is back in probably about 2010ish just around this sort of election period. I worked years back in the 80s for a guy called Peter Gertian and he was chairman of Taylor LaLon and all these things. But he'd done, I think with Michael Barbour in the Blair government, a similar role in about 2000s. And I said, Peter, you know, what's he like? Because I have witnessed, because I've done stuff with the government. Some amazing people from the private sector literally go back into government and sort of becomes zombies within six months, just lose their spark and energy. And I thought, well, I don't want to do that. So I sort of went to Peter on a couple of other people who had worked in the civil service. And said, what can you tell me? It was the lessons you learned. And he said, interesting. He said, civil service Stephen is like an infinite war, infinitely high, infinitely wide. And someone like you, but just because your energy is going to every day wake up, similar to what you'll go in there and you'll bang, run in, sprinting and smash into that wall, full crumpled on the heap. And then, and then you'll dust yourself up and you'll think, no, you never fail. Failure is not an option. Next day, you'll do exactly the same thing. And you'll keep doing this. And then you realize, if you keep doing it and you keep talking sense and keep doing the right things, eventually that wall has doors and windows, but they only open from the inside. So you have to be invited in. So I'll tell you, one of the sort of guerrilla stories in the first two weeks, I had meetings with Treasury colleagues. And I was based in both a Whitehall, 70 Whitehall and our horse guards. And the meeting was at the Scottish office, which is right at the almost Trafalgar end of Trafalgar Square end. And then I got sent up there, went to the meeting, no one there. And then I found that the meeting had been rescheduled down the other end of Whitehall. So I missed it. And I went back to my, everybody has private offices. So I'm not sort of used to this because I'm just, I'll get my own coffee and stuff, but I had six people looking after me. Did you not get rid of them in the process? I had to, it's a good point, but they, they aren't. Well, actually some of them are the most talented people and a guy called Simon French at Pam, he was the guy running my private office. What a talent now chief economist doing great things for them. So these are super smart guys. And actually I'll say all the civil servants, I was very privileged. I worked with some amazing people like Jeremy Hayward, Mark said, well, they're just brilliant people. But he said, well, I've heard that. There's been one of the tricks to play, send you off to a different meeting, different location. Oh, they didn't on purpose. Well, who knows? Who knows? I never like to speculate that about here. We are. I'm telling you the story. It's been live, yes, Minister. Yes, it is. It is. It is. Some, and some of it was, but fortunate, a few things, what do we learn from that time? The alignment between the ministers, we treated them as the board, and we were the executive. I think the efficiency during that period is, and actually Cameron deserves a lot of credit for this. Osborne, that team of consistent ministers doing their job for five years, it all stayed in place to ease them out at home, office, grace to built it. Because again, what the civil service could do if you, if you believe there's sort of yes, minister and think of it as stories, which can be the case, is if you rotate in door on the ministers, literally you never get anything done. Because new minister, brief them six months, they come up with their own ideas, 18 months later they got. The five year consistency was very powerful. Also, you couldn't put a sheet of paper between the Lib Dem ministers and the conservatives. I worked very closely with Nick Clay, and Danny Alexander. Fantastic people. And the conservatives, really good people like Comfortive Hammond, all these sort of folks. You're getting all the names in in this episode, aren't you? Truth is made English. Yeah. Well, they were good people. And David Gawr, really, really high quality people. And before we move on to what might be the potential lessons for the current government, if we're going to make the state more efficient, we've got to get the private sector in. We've got to get more private sector people in. And I have to say in the many years, I've been an observer of these things quite often. It just doesn't work. You get some guy, I'm not going to name names, but I can think of quite a few private sector people who've been absolutely useless. What role in general do you think the private sector can play usefully? And why do you think, because it sounds to me as though you did relatively succeed compared to many other people from the private sector. And why do you think that is? That some people are just so useless when they, when they transfer across. So I think, Robert, I, and it sort of cuts across and there will be privatisation, all these things. I think it's the sad thing about Britain is, is in terms of politics very ideologically driven. Right. But when you run into business and the civil services is fundamentally a business, it's a business in these to have a strategy of vision, a plan. And then you've got to execute the plan. You want to have the best talent in the right swim lanes to deliver that. And the policies any government come in with. And I'm sort of non-partisan, I'd work for Labour, the terms, conservatives. You do what the government will do. And we see it ourselves as the executive. Some of the best private sector people have been very successful. But you're right. I think if you, if you don't adapt to the environment, you find yourself in. Is it like a respect problem sometimes? I mean, because you obviously do respect the people you work with. Yeah. And I was very privileged. I did have, you know, I'll be honest, in post-Assin drama, a state school kid working class. And I'm sitting in these rooms in 70 Y Hall with all these games and lords and serves. And, you know, just amazing people like Jeremy Haywood, one of the, and he very kindly asked him in the first two weeks, would you mentor me? Just go for a coffee, everyone. And he was already cabinet secretary at that point. He was just taken over Gus O'Donnell was there. So when you arrived, it was Gus. And then he handed over to Jeremy, but Gus, again, wonderful guy from clapping down the road, actually. But these people, you know, they've got a public perception very different than the reality. And they were very helpful in getting me a climateise and supported me. And also just saying, actually, Stephen, you could probably do this differently. Because invariably as a leader, I think the crux of it come to the right point. I think we're great leadership. They can inspire any organisation with its public or private sector. And I think, honestly, in the last 40 years, since all that privatisation of water industry itself, we've lost sight of actually what matters. Stephen, lots more to ask you, but we're going to go to a quick break. Often the argument from those people who have done that have gone private sector into public sector for whatever reason for whatever type of job they talk about it being like this dinosaur system. It's really impossible to change. You know, when we talk about the NHS and things, it's this huge tanker that's impossible to change direction of or whatever. Do you think that that's not the case then that? I think, you know, maybe I'm over some fun, but actually business is simple. It's about, you know, delight in citizens in this case, treating the taxpayers money as if it's your own, spending money wisely on behalf of the taxpayer and for the government to make sure you align and drive the policy initiatives. So with these things, honestly, and the civil service is no difference, you know, people run a mile if you're not successful, but success has many followers. So what I sought to do in the first three, six months, and I took this through the ministers, I said, right, here's the plan. This is what we're going to do. This is what we're going to deliver. And it was like, this is a, so we went actually start back. We went to Francis Mauder who was the minister at the cabinet office and said, by the end of 2015, the next election, fixed term parliament coming in, what do you want to stand up and say you delivered either at the cabinet or to the people? And he said, three things, I said, right, we'll make those three things happen. That was the genesis of the plan. And if you look at the most successful companies of world people like Mark Benny offers Salesforce, he is exactly the same methodology and result planning. He has a methodological V2 mum vision values, but essentially is to have a plan for what you want to achieve. And then everybody align with that plan and then executing to be successful and break it down. We had it on a quarterly basis. And that derived at the end of the 2015 52 billion pounds of savings that we delivered during that period. And can I just ask therefore if we just bring it up to date and we're 52 billion is a bigger and useful number as you say. And that was for 52 billion pounds per annum on what the salary is that you were no longer paying. Is that was that was the whole of it? So that was again, we, when we turned up Robert in 2010, there was no day, Tron, anything. We didn't even have. state on what supplies we spent money with. So we had to, we didn't have anything, Steph, nothing. So we had to write to the supplies, we wrote to the department and we started building a very basic sort of management information system. It was basic, it was rudimentary. But we used that as the baseline and then that 52 billion, this is not misrepresentative, it was cumulative savings. - Oh, sorry, so that's everything. - So by the time you get to any, it's cumulative, it's basically, it's adding up all the savings over the five years. So by the baseline was 2010, but in 2015, we actually generated that year against the baseline 20 billion pounds of savings. - So that's an annual saving, 20 billion. - Yeah, correct. - That's a very substantial, you know, that's a, you know, couple of pennies on, - Yes, well, it's not secure, it's not big. - I mean, that's income tax, isn't it? So it's three pennies off income tax, really. - But, but therefore if we now apply it to where we are today, I mean, there may be, for all I know, somebody in Whitehall with your breadth of responsibilities from the private sector, but I'm quite close to 100% certain there is nobody in your kind of job doing that today. You look at the size of the civil service before COVID, right? The size of the civil service has exploded, you know, since the COVID crisis. I mean, I think it's up more than 100,000. - And Brexit is now. - Yeah, and Brexit is for something like that. - But it's about more than 30,000. - Yes. - It's gone up 150,000 since you left. - Since you left, 150,000. - You've got reform talking about slashing numbers, you've got the Tories talking about slashing numbers. You don't, you know, we've even had the government talking about reducing numbers, but without very clear specific targets. If you look at the more than 500,000, what would it be reasonable as a target to reduce the size of the civil service without damaging the quality of public services? What would be a sensible target at this moment? Is everybody will say, "Headline number," and I remember Steve Hill, and given those headline numbers, and it was 250,000 or whatever it was. I'm gonna answer your question, but we lost sight of it. It wasn't just about savings. - Is it possible to massively improve the productivity of government, the efficiency of government, you know, and by doing two things, one improve, you know, the way they work. - And to reduce the numbers. - Yeah, so I think there's sort of three elements on the strategy we put in place. One is massively reform the civil service to have richer reductions and create huge savings, and that was the 52 billion, cumulatively 20 billion run rate. Secondly, innovation. So an innovation on what, what, when I turned up, you used to get McKinsey's and Bains doing studies, project was a disaster, connecting for health to a good example, 14 billion wasted, and there wasn't a GP in the room. - What was that one? - Connecting for health. - That, you know, there was horror shows where these massive gargantuan projects never delivered. - When I turned up in 2010, we spent 3.6 billion a year on consultants, you know, people reading our watch, telling us the time, and then the assurance you have, you go to the public council committee, well, we got McKinsey and, well, we got the best people in the industry, and I know it's a disaster, but what we did all the right things, know that, so we said, no, we're gonna insource us. We're gonna hold civil servants accountable responsible. So we actually cut the consulting spend from 3.6 billion, 2011, 12, it was 800 million. - Wow. - Now I was the most unpopular person with McKinsey Bain, but it was not even right. - No, you've never had a highly paid advisory position by McKinsey something, really. - No, but as well, day one, I found out that companies were spending a million on hospitality at Wimbledon and the FA Cup final, and civil servants who were involved in procurements. - Retended. - Yeah. - So I banned hospitality, all over private, I for a couple of editions. And then obviously, you know, they find some senior civil servant, I'm actually attended, you know, a ballet with McKinsey, so that's the story. But no, come back to this, so massive savings. Secondly, innovation and growth. So great, the people I work with were brilliant. They all delivered in-house, gov UK in 18 months, and it won United Nations most digital government in the world in 2015, '16. And the final thing is growth, growth, growth. What we need in this country is sustainable growth. So what we worked on with these SME strategies and procurement strategies to really pump prime and use government procurement to really fuel regional growth. What percentage of procurement, that's government purchase of goods and services, A, went to British companies and B, went to smaller companies, and how did that change on your watch? - That's great question. So the small, the SME was, but it fed with 95% UK companies. And we found that out 'cause we didn't have the data with the stuff. - So I said again, so. - But we 95% of the SMEs were UK companies. UK tax pay and UK dumbass. - But you came up with it. - So what was the government were using when you came in? - Yeah, but that was 2.6 billion of spend. So government at that time was spent about 43 billion a year on, it's obviously expanded. Now the government spends on public procurement, 430 billion a year. So actually in context is probably worth no. And the sort of, I guess, my direct responsibility was central government, which is these 24 departments like DWB and HMRC and the foreign office. But beyond that, there's much greater spend happening across the health service, education and local government. And this was again part of the strategy. We had a plan and it evolved to change to the procurement policy, training the procurement folks, engagement, comms, going around the country, people like Learmax or the CIO went round to Newcastle, went round to Edinburgh Cardiff and went and said with people like British Chamber of Commerce, where the government's open, the message was government's open. - And is it British SMEs you're talking about here? That 6% was British SMEs. - Yeah. - And that went up at the end. And the credit actually, Cameron set a target and he bought into it. He said it's got to be 25% in 2015. We hit 25%. So that's 11 billion. - How so the difference? All these interventions we made were shifting the dial to actually, so again, I remember sitting in front of Margaret Hodgkin talking about public procurement. I think in the early days, 2010, the average procurement was like 337 days. So if you're a small business in Mac or field, you're going to lose the world to live. We got it down to like 30 days. - These are payment terms. - This is a payment terms. Is it, no, no, what do you mean? - To get the contract. - Oh, yeah. - It could have been over a year. - Yes, which business can have a lot of life. - Multi years, they can't survive. So they've been in the procurement, they have to go through all these states. So we introduced all these things like G Cloud, government cloud like Gammazen for small businesses. - Gammazen. - Yeah, whatever it was called, you know, but it was G Cloud. - Yeah. - But essentially it was in those early days, like just making government open for business and having the systems and the marketplaces to allow small businesses to bid for government services. - So when we talk to small businesses who want to get contracts with the government, one of the arguments that's put to them is that they're more expensive. Did you see in that increase of percentage of small businesses you were dealing with, they're increasing cost as well? - No, clearly not, because we made the massive savings. So the savings were derived and probably the biggest kind of element of the savings was around procurement and commercial practices. Obviously headcount was a factor. IT was a factor, all these things, major projects, property, all those sort of factors. But the biggest one was really around the reforms on procurement and commercial practices. And we therefore increase from 6% to 25% of spent with their sonies. - And you save money by even while buying budget. - You save money while buying budget. - Save money, but drove loads more innovation. So people on the GFUK project were civil servants and some of these small medium businesses. The best IT shops in, we put GDS government digital services up in Hoban, they work with a number of SMEs, IT agencies that had the skills to actually deliver GFUK, you know, a world winning award, United Nations, all that stuff. But it's changed the way we deal with as a citizen, TVLA, passport applications. That was the platform. It was light years ahead of anything else. And we, you know, just simple stuff, started with the user needs. What does a citizen want? How do they want to interact with government? And obviously you have to be sensitive to elderly people and people who aren't with laptops and mobile phones. - The numbers. So it started at the 6th and 2010. We got it to 25%. We agreed that for the next government, effectively, obviously this has got cross-party support. So everybody bought into this. It was common sense. It was going to be 33% over the next five years. Honestly, the last 10 years, it's been chaotic. Pretty much all the things we put in place, controls, procurement policy, a commercial reforms, the literally, the tide has washed over the sand. - What? - For print say gone. So now civil service numbers, 530,000, gone from 380,000. On procurement, we've gone backwards. It was 25% in 2015. It's now 20% and actually credit and a shout out for British Chamber of Commerce. They're really holding the torch on this. They're working with these guys, truss all to provide all the data. But it's gone backwards. And here, I'm saying-- - I'm saying you think that is. Is it the shock of COVID or what? - No, I think there is something, one is COVID probably didn't help in terms of procurement. Then the civil service reacts, or any organization reacts very negatively. They're constantly criticized. and obviously the PPE and all these sort of things. what they did in that period was the Chambles. - And Brexit, the bureaucracy around Brexit. - Yeah, yeah, but effectively we've lost, we've lost the genesis of really the growth gene SMEs, British business. And I just said, is it a lack of leadership at the top of whitehall? Is it a lack of leadership at the top of government? I mean, you talked about how destabilizing it is to have constant churn of chancellors and ministers in general, which we did see up until the last general election. I am struck that there is nobody, apparently, in the government with your authority, focusing on these twin aims of improving procurement purchases of goods and services. And making sure we've got the best civil servants of the right number of civil servants. - Correct. - So all these things are simple. They are common sense. But when you dive into the detail of dealing with the civil service and reforms, it becomes massively complex. But you have to have a vision, you have to have a plan, and then you have to have strategies or policies or whatever you call them. And then you've got to have also execution, execution started driven by highly competent, capable people. So if those are missing now, I left, and I'm not sort of doing the spill milk kind of routine. It's been pretty chaotic since about 2017, politically, and up to the election. And obviously, I think people in this country voted for stability. But you've still got to have a plan, and you've got to have a vision. And people, this phrase, sort of, this is a non-political phrase, it's a common vote for change. Well, what change? I want to know the specificity of actually, what are you going to do for our service? What are you going to do for infrastructure in this country? What are you going to do for growth? What are the strategies for growth? What are the strategies for small businesses? And on the last question, Rob, I'm now running a small business, UK listed company. So we want more of those on the London Stock Exchange. Fantastic development centers in the North of England and Belfast, pay UK taxes, employee UK people, no off-shorting, everything's here in the UK, and growing 180% last year. And yet we struggle to get into government. And why in 2023, they change the rules. When I was there with Francis Moore, we obliterated, well, there was a crazy thing into that intent. You had to be something like profitable for five years. And all these quick asset tests and all these sort of things to become a sub-blog. But you real sum it up? Yeah, exactly. So that rules probably 90% of SMEs out. So we actually looked sensible about how do we protect the government, but actually take a lot more risk in terms of supporting the private sector with SMEs. You have to do that. In 2023, they reintroduced Dunham Bradstreet Score and all this sort of stuff. So they've got now-- What's that? They said it's a credit rating. Oh, yeah, yeah. So a lot of SMEs now will be ruled out just because they're financially-- look at SMEs when you start off. You might make a loss for the first year. That's the reality. You probably have to invest in the business. If you're a technology company, you have to invest in a product. And then you get sales and you get momentum. There's a sort of crossover point where you start generating cash and profitability. But what we need is-- I mean, the head of the minister-- I think if what you just said is the government is currently putting really quite a lot of money through its sovereign AI fund and the British business bank into these tech startups whose credit ratings will be-- Well, they won't have them because they're new and they've brought-- They've been brought in putting money into businesses. They won't be able to purchase from exactly. But the perverse thing about that is the quantum as well. So that's sovereign AI fund. Big fanfare, lots of ministerial speeches, which obviously they love. 500 million. Yeah, sure. Right? The US this year spent 600 billion just between five companies. Your 400 billion is procurement, not just central, but we're including schools, we're including the health service, we're including welfare. This is a massive amount of money that if deployed effectively by the government could really help the economy to get out of the doldrums, isn't it? Absolutely. So it would be number one in front of Rachel Rees when she comes out at 11 in plain sight, right in front of her, how she could just literally adjust and provide some levers in public procurement to pump prime growth in the economy. Is sitting there and the evidence. So just give you a couple of examples. KNOS, great company out in Belfast. But I think in 2010 with about seven consultants into governments, a small and medium business, they ended up with hundreds. They did an IPO on the London exchange, one of the most successful tech companies over the last 15 years. They hired just before the IPO 400 jobs in Belfast and Derry. You know, this is and they are not announced yesterday, 20 million investment again in Belfast and Derry, another 300 jobs and apprentices and AI jobs and all these sort of things. But that was spawned off the government procurement forms to actually invite them into government, which initially they'd never considered because it's too hard, takes too long and they would lose money on it. So we had to change that completely. But there's so many cameos and actually just stepping back because in the wider public sector, there were 600,000 job losses during that 2010 to 15. One thing we were agonising about is can we pump prime the growth in the economy through some of the reform side and supply side to actually get the growth moving. And so you look at growth in that period, I think 2012 to 15, 2% to 3% economic growth, GDP growth in the UK. After the credit crunch, so you could argue the comparables a bit underweight, but there was strong growth in the economy and the private sector job growth was really fueled a lot by government being on the pitch with this procurement helping small and medium businesses across the UK. So a lot of small businesses we talked to who are saying they're getting the kind of verbal enthusiasm from governments. So for example, I've been talking a lot about the work that Rachel Reeves has been doing in the north with the mayor there, Kim McGinnis. There's been lots of events at number 11, getting business owners in, female founded businesses. There was a bigger event like that. There's lots of, you know, we've talked to manufacturers in the north who have said that they've had ministers around, like the Defence Minister visited in this company in Sheffield, it makes a claw thing for the military. But nothing is going any further than that. So it's like they're getting the lip service, but then it's not following through into contracts for people, into actual real investment and money. Yeah. So Steph, I think that's very fair. And I think the data says we're going backwards here. And I'll come back because you asked the question about what's the price. The price is probably £100 billion. We did £50 billion in that 10 to 15 with the waste and expansion that's happened since. And the opportunity for things like artificial intelligence within government, we're probably looking at a price of £100 billion in a phone. £30 billion run, right? Oh, at least. Generally, at least, off the baseline of today, at least £30 billion. I'll come back. And I did actually make some suggestions to the current government around how they might achieve this. Dusting off, it's not just us having done this. You know, we looked at Singapore, Estonia, some of these really innovative governments and credit to France is more for doing that. And we bought the breast in and then got the best people to actually drive us. The opportunities even greater now. And as a company, it's not just us saying this, there's lots of companies and I know you talk to B, Malik, Stephanie. What's happening is governments seem to be addicted to non-UK technology in our space, particularly obviously from the US. I think 90% of the cloud services provided for the government are provided outside non-UK supply. So basically we're just shipping taxpayers' money off to the West Coast. And what happens is so the US with DARPA, really in terms of robotics, AI, SpaceX, 2 trillion dollar IPO last week, but that was all backed by contracts in the early days from DoD and NASA. And that was public money in the US that actually fuel these companies. And the US is buying these billionaires and the new trillionaires. They've all been effectively subsidized by the American government. Absolutely. The American taxpayer through DoD and all the programs they put together are DARPA to do that. And so to your point, the rhetoric, obviously when I worked in government, ministers love a headline they'd love doing the morning rounds, we're good news. Everybody loves good news. But you've got to follow it through with a plan and execute it. Honestly, they in government, you talk about policies and delivery, but it's the same in the privacy. But as you've got point, you made earlier, both made it. It's that short termism as well, isn't it? So the ministers are looking for instant results from things there because they're worried about whether they're going to survive the next election. In some cases, they're worried they're even going to survive the next few weeks. So that has a real impact. And you talk about the days of Cameron and Osborne. That was a stable time, wasn't it? Like you said. And now it feels like everyone is just running around trying to make quick decisions and that's a big problem for the economy. Yeah, you guys are obviously much more connected in terms of the political establishment. But I would say every one of these ministers I've met, they want to do the right thing. They're passionate about Britain. But sometimes, and they obviously love making great speeches, but they need to understand you've got to have a plan. You've got to have beast around it by really competent people who can execute these plans. And if I look at, but who would want to be motivated to go into politics today? It's one of the problems when you are trying to bring in efficiency gains, when you're trying to cook budgets, when you're trying to cut staff. It becomes a bit of a land grab between ministers though who don't want to lose anything from their department because then you know There's a lot of egos at play here and if your budget's cut and your number of your head counts cut It looks like your lives in power and you see that in business as well Do you think that's an issue in government? It could be but again, I think you need to reframe it and it's all about It sounds so simple, but it is all about leadership and the narrative and the vision and then aligning everybody in the organization With that vision with the same values, simpler as that and if we had people competing on the gauve UK Candidate applications to be the first and obviously the implication of digitizing your services whether it's rural payments agency Is it will evolve to technology rather than people manually doing these things? So there will be savings and the implication is you'll have a smaller department But actually if you're providing excellent service service to agriculture and the farmers Then when you go out to the farming communities you're going to get grave reviews You know now if you go down to It's just a funny story You used to have what 12 articulated trucks driving down the M4 every day taking paper driving licenses every day Why you do that when you can now we all sit here and we think that must have been out there with steam engines And it's just crazy So now the world is digital the opportunity and you asked me a question I didn't answer it So I think the price for this government could be 100 billion of savings probably on an annual basis about 30 billion Because we've really gone backwards on this you're a great optimist And you plainly You know it's it's it's tangible you have an enormous respect for the public Service the problem we've got the moment is We have got expenses that gone through the roof and a lot of concern about civil service inefficiency But it's also combined with a sort of relentless Negativism actually you know not just Of perhaps some on the right who you would expect that of whether you know their tourists or Reform but actually ministers in the current government relentlessly negative about their own Officials, you know saying they're getting the way or they're no good and Somehow I mean, I think you know, this is a let's on the basis that any burnem is taking over I hope he's listening to this podcast because if I were here might be listening to you and I would be thinking there are two things I could do here I could really get the morale of the public sector up But I could also make it way more efficient because if you can somehow make a partnership With Whitehall that you got to get the numbers done you got you got down you got to get the efficiency up But you're on a mission to make the whole of the UK more productive And you know perhaps say 30 billion a year that you can then put into hospitals and schools if those are your Priorities, you know, there's a massive opportunity here um But it comes back to that that thing you've you've said so many times which is quality of leadership And in the end that seems to be something that we've just lost in recent years Not a leadership and culture and and again, I know Obviously it particularly in the sit-car and vote and everybody's presented it as a binary choice Do you want to spend more on defense? Oh, will you have to spend less on health? It's much more nuanced than that It's much more complex the way government works and that but you could definitely say probably 30 billion on a run rate Paranum out of the public sector that you wouldn't have had to have the battles on winter fuel payments Or well, what you know winter fuel payments was 400 million in the air You said drop in the ocean. There's there's a prize of probably in this Parliament still 100 billion cumulatively 30 billion a year welfare what were they after three or four billion Look at the big picture where the savings is literally in the front door of number 11 Just look around whitehall and how do they reform that with great leadership innovation and it will the things that's missing Robert and the breaks my heart Everybody in the government started talking about we're going to be focused number one priority number one priority Growth Growth sustainable growth get back to that two to three we have to be granted two to three percent Because otherwise we're falling behind we're falling behind in terms of productivity You know, we're way off the benchmark now And and it's not really good to compare yourself to France and Germany. Why don't you say we're going to be granted three percent? How do we do that? Yeah, totally We can use that pool of government procurement to be on the pitch, but also much more collaboratively working with industry Um, and I think that that's the prize that's missing Steven that was such a fascinating conversation thanks so much and Yeah, I mean, you know Andy Burnham if you are listening is quite a few quite a few useful ideas for you here I think he might be a bit busy today. I think but uh when he listens to it later on after today We'll find out but thank you very much Stephen lovely to have you here. That's it from us on the rest is money. Bye. Bye. Bye (upbeat music)