The day is so short that Joe Bloggs can “legitimately” fill his waking hours watching Snore-Factor, Z-List Big Brother, I’m an Imbecile, and other such stimulating television. The concept of a “beach body” is no longer valid. You don’t have to have a tan. Hence, diets are out the window and Special K sales plummet. It’s simple a much easier time us. However, the real treat is central heating. It doesn’t matter how cold and wet the weather, the stiff-upper-lip, Blitz-spirit of us Brits means that to be seen bleeding a radiator, filling a hot water bottle, or even contemplating running a bath between June and September, is to admit that today Britain is no longer a world power and, in fact, we are just a very small country, in the North Sea. Ahem! In September though, it’s game on. Curtains closed, feet up, heating on. But, that’s not going to be so easy this year.

The powers that be (that is those who provide us with the means to power radiators, watch Snore-factor, boil kettles etc.) are going to make it a lot more expensive. Last month Scottish power became the latest to increase their charges, bringing them in line with their competitors. Their prices increased on average by 11%. Just by itself, 11% sounds like quite a lot. In context, “your energy prices are about to rise, yet again, this time by a minimum of twice the level of inflation. Almost four times the level of inflation if you’re unlucky enough to use gas. The average cost to a householder’s energy bills will be in the region of £200.”

(http://www.thesundaytimes.co.uk/sto/comment/columns/rodliddle/article676025.ece)

Just to make it clear I am not singling out Scottish Power. This applies to all the energy providers (British Gas, eon, Npower, SSE et al).

However, it doesn’t just end with the energy companies. Two days ago it was reported that “Telecoms giant BT is to raise call charges for residential customers by up to 5% on 3rd December – the second increase this year.” Line rental prices will also rise. So not only is it going to be more expensive for you to stay warm while you watch Snore-Factor, but it’s also going to be more expensive for you to call in and vote. Do these people have no mercy? In fairness to BT they have issued a statement, claiming that “the average calls bill has fallen by 15% since the start of 2010, as customers have switched to better value inclusive plans.” However, many people will not know about this, nor know how to do this.

(http://www.bbc.co.uk/news/business-14691007)

Fear not though: At least for businesses help is at hand. We manage your suppliers and check your bills every month always ensuring you are paying appropriate rates for your usage so fear not, UK plc, with our help, you can have a happy Winter.

Speaking on Catalunya’s TV3, Sandro spoke of his worry:

“I am concerned about the club’s economic sustainability. We have to balance the books.”

He went on to discuss measures adopted to date:

“We removed the catering events, our bodyguards, and we have even stopped making photocopies in colour at the club. Now we do black and white and save on toner.”

This is all well and good, and Mr Rosell’s attempts are to be commended. He’s certainly doing more than Barcelona’s great rivals, Real Madrid, are doing down the road. However, despite his best intentions, I have spotted a flaw in these cost reduction plans.

Since making this announcement, the club have spent £65 million on the signings of Alexis Sanchez and Cesc Fabregas. Now, I don’t know who’s providing the photocopying contract for the club, but you’ll never balance those books by cutting down on toner costs, Sandro.

If you are reading this, and would like more help, my email is rhys.brennan@auditel.co.uk. I look forward to hearing from you.

Si esta, y tienes alguna pregunta o consulta, no dude en escribirme a
rhys.brennan@auditel.co.uk

Si esta llegint aixo i tens alguna pregunta o consulta no dubti en escriure’m a
rhys.brennan@auditel.co.uk

“Private consultants are being paid £4,000 a day by the Ministry of Defence to help it to cut the costs of its contracts…

Under an agreement described as “extraordinary” by one MP yesterday, eight consultants will also receive a 30 per cent “success fee”, pushing their daily pay to more than £5,000 each.

It is also understood that the MoD departed from normal practice in awarding the contract, worth up to £12 million, by failing to advertise it before recruiting Alix Partners, a US-based company with a London office.

Industry experts criticised the deal, saying that the fees were unusually high and that the failure to advertise the contract might have led to an unnecessarily high bill for the taxpayer. The details have come to light as the Armed Forces pension scheme is cut and hundreds of redundancies are made.”

You can go here to read more.http://www.thetimes.co.uk/tto/news/uk/defence/article3137644.ece

The irony is rich that in an attempt to reduce costs the Ministry of Defence have only managed to increase them. Another interesting subplot is that while unemployment levels increase in the UK, government departments appear to be giving contracts to foreign firms. Firms such as McKinsey, a London-based firm, ranked 42nd in The Times Top 100 Employers, and widely regarded as one of the top consultancy firms worldwide, must have been disappointed to not even get the chance to bid for the business.

I would surmise though that Auditel’s Total Cost of Purchase Business Model is exactly what the MOD could have done with. Based on a share of savings achieved, the offer is risk free and can only be cash-flow positive for the client. Egg-on-face could have been avoided.

Saying that if the Ministry of Defence want to pay me £1 million a year, I’m not going to get in their way…

Through the Riots Act 1886, which states that where damage is caused by people “riotously and tumultuously assembled” local police authorities are required to compensate victims, the British taxpayer will end up paying over £100 million. Given the current financial climate, this is a bill that the country could certainly do without.

While it is true that neither David Cameron nor George Osborne were caught with a 50” Sony Bravia in the middle of Tottenham High Road and Boris Johnson has not been seen sporting a brand new pair of Nike Air Max Ultra’s in the last few days, they (at least the first two) may have to accept some of the responsibility for what happened.

Yes, we are in the middle of a recession, and cuts are necessary, but it is no coincidence that much of the rioting in London occurred in its poorest neighborhoods. Tottenham has the highest youth unemployment rate in London. 6000 people, or 8% of the adult population are claiming job seekers allowance, which is more than double the UK average. One fifth of these claimants are under 24. Yet, in the same borough, the youth services budget has been cut by 75% this year. These figures are similar in Hackney, Brixton, Lewisham, and Croydon, and it may not be coincidence that these are the areas worst affected by the rioting and looting.

Strict measures do have to be taken in the UK. Reuters have predicted that the economy will only grow by 1.3% in 2011 and only 2% by the end of 2012. We do have to rein back on spending, but a lot more thought has to go into it. We have a new government and they had to take steps to reduce the deficit, but a knee-jerk, poorly constructed approach to cost cutting will only cause more problems, not provide the solution.

At Auditel we understand that it is important to retain value, while reducing costs. Our measured approach will mean that while we will find areas where we can reduce costs, we will not do so at the risk of harming your business. Perhaps, the government has not been so measured, and, as a result, have they harmed society?

Case Study:

Download a PDF copy of the case study.

Left to right: Denis Brennan, Auditel Consultant and Kieran Dempsey, Christ College’s Bursar

In common with many such institutions, Christ College Brecon, faces the constant twin challenges of controlling overhead expenditure, whilst ensuring that it can still meet the requirements of its pupils and the expectations of their parents. At a time when it is especially difficult to raise revenues, this becomes an overriding necessity.

In October 2008, having identified the need to take a closer look at the school’s costs and impressed by Auditel’s free business health check, Christ College’s Bursar, Kieran Dempsey, invited Auditel consultant Denis Brennan to carry out a review of the school’s utilities expenditure and propose possible ways of lowering their costs.

“For a number of years, we have outsourced our utilities management. We’re not a very large school and don’t have the time, funds or personnel to dedicate to analysing overheads ourselves,” explains Kieran. “I had felt for a while that we could probably do better, so Auditel’s offer of a free business review was very timely – and too good to ignore!”

Concentrating on immediate opportunities for costreduction first, Denis quickly identified the chance to negotiate lower fixed-line telecoms costs, resulting in savings of £5,000 or 34%.

He then turned his attention to the school’s energy expenditure.

When he was engaged, their energy spend had still been in contract with suppliers who had been engaged by a broker previously employed by the college. But as the gas contract was approaching its end date, Denis began to analyse their expenditure. He soon discovered that a number of gas meters were being charged at out of contract rates, even though the remainder had been transferred into a fixed term, fixed price contract with another supplier. This gave him the opportunity to negotiate a revised fixed-price contract which saved the College a very significant £55,000, or 56% in the first full year. By constantly monitoring the contracts and markets, Denis continued to reduce the school’s overhead costs, saving a further 21% on the gas supply in the following year.

A number of small electricity supplies were also renegotiated producing a 16% saving in year one. These supplies, consolidated with a single supplier in year two, produced a further 16% saving.

Most recently, the College’s main electricity supply, in the fiercely competitive half-hourly market came up for renewal and a 5% saving was achieved.

Delighted by these initial Auditel successes, Kieran has now asked Denis to examine the school’s spend on office consumables and cleaning and janitorial supplies, with a view to reviewing other categories in due course.

Savings Achieved:

Landlines – 34% Saving
Gas Year 1 – 56% Saving
Year 2 – 21% Saving
Electricity Year 1 – 16% Saving
Year 2 16% Saving

Ongoing Additional Projects:

Office Consumables
Janitorial Supplies

Download a PDF copy of the case study.

Case Study:

Download a PDF copy of the case study.

Left to right: Ravi Khakhria and Denis Brennan, Auditel Consultants; Chris Jones, Finance and Administration Manager and Tessa Norgrove, Bursar of Haberdashers’ Monmouth School for Girls; Claire Power-Browne and Steve Ray, Auditel Consultants

Auditel’s analysis has already saved 22% on utilities costs for Haberdashers’ Monmouth School for Girls by ensuring they are on the most appropriate contracts and tariffs.

Tessa Norgrove, the School’s Bursar, was first introduced to Auditel by Claire Power-Browne and her Business Partner Steve Ray. Tessa and colleague Chris Jones have now been working with them and other Auditel consultants brought on board, since late 2009.

“We had worked with brokers and other consultants in the past and have always been very happy to meet with people who can help us improve our efficiency and effectiveness,” says Tessa.

Shortly after the working relationship started Claire and Steve invited their Auditel colleague Ravi Khakhria to assist them. Steve Ray commented, “having worked alongside Ravi for many other projects Claire and I had no hesitation in asking him to join us. He brings a wealth of knowledge and experience in the initial areas that the school invited us to review”.

Chris, who is the School’s Finance and Administration Manager, continues, “I’ve had a lot of direct contact with the Auditel team over the past year and am very pleased with the service they’ve provided. Everybody we deal with is very professional and a delight to work with.”

So far, Auditel have reviewed the School’s gas, electricity, landline and mobile communications expenditures and have found savings up to 22% in these areas by moving the School onto more appropriate contracts and tariffs. In addition, they have recovered over £43,000 of incorrectly applied electricity charges.

As Chris says, “This is a very nice saving to have and as well as improving our cash position, means the impact of rising energy prices over the past few months has been mitigated.”

Going forward, Auditel have been invited to review additional categories, including Stationery and IT consumables as well as Janitorial Supplies.

A major strength of the Auditel approach is the collaborative working which allows teams to be formed of affiliates with expertise across a broad spectrum of specialist disciplines. It was this “virtual corporate structure” approach which led to Auditel colleague Denis Brennan being asked to help Tessa review the IT provision across the three Monmouth School sites.

“This project is in the very early stages (December 2010) but is going very well so far,” says Tessa. “We’re not just looking at cost on this project but at the IT management structure and service provision across the three sites so it’s quite complex. Even so, Denis expects to get an initial report to me by the end of the year.”

Savings Breakdown:

Electricity – 15% Saving
Gas – 16% Saving
Landline and Mobile Communications – 22% Saving
Plus electricity rebate of over £43,000 from a review of the supply criteria

Download a PDF copy of the case study.

On a personal note, I was delighted, and very humbled, to be voted by my peers Auditel’s “Consultants’ Consultant of the Year”. After last year’s Rising Star award, it makes you feel that you must be doing something right. My thanks to everyone who voted for me and, as usual, to the whole of the great Auditel network. My sincere congratulations to all the other winners, in particular Laurence Fitch and Ruth Dawe who, most deservingly, won ‘Franchise of the Year’ award and to Steve Rae and Claire Power-Browne who, equally deservingly, won the Rising Star award.

During the conference I also signed up for the Great British Bike Ride, a charity ride from Lands End to Twickenham at the end of August 2011. So, if winning the award makes me think I must be doing something right, this proves that I also frequently do something mad – by the way, the aforementioned Steve, Claire and Laurence are also participating in an Auditel team that, at present, is the single largest registered. More in due course on how you can sponsor me for some very worthy charities.

Saturday saw me, more or less recovered from Friday evening’s celebrations, travel home to Wales to spend a very lazy afternoon watching rugby and football on TV – I fear for the Northern Hemisphere in the upcoming November Tests and I have never seen anything like that second United goal (and perhaps no one else has either).

Now, back to business, inspired as ever by the Conference and boosted by my award. I’m busy negotiating energy contracts for my clients – maybe I can help you too. Call me on 01554 770816 or email Auditel to find out how – you might win an iPad – just ask me how!

“asked by the Prime Minister in mid August to carry out an efficiency review of Government spending, focusing on commodity procurement, property and major contracts”.

You can read his report by going to the Cabinet Office website here.

His findings are, frankly, pretty damning. The following bullet points are excerpted from his report :

• Basic commodities are bought at significantly different prices across Government departments.
• Multiple contracts have been signed with some major suppliers by different departments at different prices.
• Data is very poor and often inaccurate.
• Government acts as a series of independent departments rather than as one organisation.
• There is no motivation to save money or to treat cash “as your own”.
• There is no process for setting and challenging detailed departmental budgets.
• There hasn’t been a mandate for centralised procurement.
• There are inconsistent commercial skills across departments.
• Fixed line telecoms …could be 30-40% cheaper

So, central government doesn’t procure its overheads professionally. You may or may not be surprised. The government may or may not take action.

Sir Philip Green, when asked what would happen to one of his businesses who behaved like this, was scathing, talking of bankruptcy. You can read more of his views in Robert Peston’s BBC blog here. Big businesses often have professional procurement teams dealing with different categories of procurement.

But for the SME, this is usually beyond their capabilities. Someone is certainly tasked with looking at overheads but cannot devote sufficient time, attention or, frankly, focus to do it. We, at Auditel, fill that gap. We provide the detailed focus on our clients’s essential business costs, ensuring that contracts are managed, costs are as low as they can be commensurate with service. Are you sure your business doesn’t need a ‘procurement efficiency’ review, or, as we call it ‘ a free business healthcheck’,  - ‘free’, because we carry out the audit at our risk, the risk that we will find no savings. However if we do, we share them, so it still doesn’t actually cost you anything and we continue to manage the categories for you into the future.

Sign up for a free business healthcheck before 30th November and you’ll be entered in a draw to win a new Apple iPad, in time for Christmas. So, Email Auditel now or call on 01554 770816

“Business facing a wave of green taxes
Thousands of British businesses will be liable for significant fines and charges under a new government “green tax” scheme.”

The story referred to the imminence of the Carbon Reduction Commitment (CRC) scheme which may well be able to lay claim to the unenviable title of ‘least known government initiative” if we are to believe some of the content of the story. One consultancy “estimated that a total of 7,500 businesses would miss the deadline” this from a possible total number affected of some 19,000. You can read the whole story here.

But what is CRC and is your business affected?

The idea behind the scheme is to identify the major users of electricity and, by using a combination of chargeable permits and bonuses or rewards for a reduction in use, to force firms to reduce their carbon footprint. Only very significant users, those who spend perhaps more than £500,000 per annum on electricity will initially have to buy the permits but some 15,000 smaller organisations are required to register – namely any organisation that had a half-hourly electricity supply in December 2008. Failure to register by September 30th will result in a fine of £500. If your company falls into the group of large consumers, using more than 6,000 MWh (Megawatt hours) per annum, such failure will cost £5,000 plus £500 per day thereafter up to £45,000, perhaps worth 10% of the company’s electricity bill.

Registration is online via the Environment Agency’s website or you can ask Auditel to help you register.

Don’t delay, act today! Email Auditel now or call on 01554 770816.