Is this the worst government statistic ever created?

April 23rd, 2012 by Ben Goldacre in economics, evidence based policy, government reports, politics, pr guff, statistics | 23 Comments »

I forgot to post this column up last year. It’s a fun one: the Department for Communities and Local Government have produced a truly farcical piece of evidence, and promoted it very hard, claiming it as good stats. I noticed the column was missing today, because Private Eye have published on the same report in their current issue, finding emails that have gone missing through FOI applications, and other nonsense. That part is all neatly summarised online in the Local Government Chronicle here.

Is this the worst government statistic ever created?

Ben Goldacre, The Guardian, 24 June 2011.

Every now and then, the government will push a report that’s so assinine, and so thin, you have to check it’s not a spoof. The Daily Mail was clear in its coverage: “Council incompetence ‘costs every household £452 a year’“; “Up to £10bn a year is wasted by clueless councils.” And the Express agreed. Where will this money come from? “Up to £10bn a year could be saved … if councils better analysed spending from their £50bn procurement budgets.”

A 20% saving on the £50bn council procurement budget would be awesome. And this is a proper story, from a press release on the Department for Communities and Local Government website: 20% of the £50bn procurement spend could be saved by seeking better value.

Government ministers have an army of intelligent, technical staff, with full access to every speck of data, ready to produce research. But these figures come from a “new, cutting-edge analysis of council spending data by procurement experts Opera Solutions”.

I downloaded the “Opera Solutions White Paper“. I recommend reading it yourself, to understand what a minister considers a substantive piece of research.

The “full report” is six pages long, not including the cover. The meat of it, the analysis, is presented in a single three-line table. Opera took the recently released local government spending data for three councils, and decided how much it reckoned could be saved by bulk purchasing.

It did its estimates on three areas: for energy bills (a £7m spend), and solicitors fees (£6m), it thought councils could save just 10%. The third category – mobile phone bills – were tiny in comparison (just £600,000) but here, and here alone, Opera reckons councils can save 20%, by getting people on better tariffs.

So, for mobile phones, an incompetently regulated sector well known for making money from deliberately confusing pricing schemes, where phone companies hope the trouble of checking your usage pattern will be more effort than it’s worth, Opera reckons councils can save 20%. No problem.

Then, even though for £13m out of £13.6m of their spend calculations, Opera could only find 10% of savings, it cheerfully applies this magic 20% from the tiny mobile phone spend to the entire local government procurement budget of £50bn, magicking up £10bn of savings, £452 a year for every one of us.

And even before that astonishing, shameless bait and switch, these figures are all presented out of nowhere. There is no working at all for any single saving, no description of how 10% or even 20% was calculated: just that three-line table telling you how much Opera Solutions reckons councils can save. There’s also no justification for choosing energy, solicitors, and mobile phone bills, out of all the things councils spend on. Were these where Opera thought they could get the biggest savings? Who knows.

The document is six pages long. We’ve covered one. What’s in the rest? All that follows is a four-page glossy brochure advert for Opera Solutions management consultancy services in local government. “Opera Solutions has successfully completed procurement optimisation projects for hundreds of organisations around the world.” “Opera partners with clients to work as a catalyst.” “Opera addresses these issues through Insight CubeTM technology, which creates deep visibility into spending information.”

Meanwhile, back in the real world, what do local governments actually procure? Well, the biggest thing, about a quarter of this £50bn budget, more than £10bn a year of local government procurement, is social care: mostly residential care, mostly for the elderly, and most through the independent sector.

If you’re going to save 20% off that, then I suggest you tell us how, in full and educative detail. In the meantime, saying you can get us a better deal on our mobile phone tariff, and then pretending that means you’ve taken 20% off the entire £50bn local government procurement spend, isn’t just misleading: it’s the reasoning of a 10-year-old.

Seriously, read the ludicrous report for yourself here. It’s amazing. 

 


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23 Responses



  1. Yogzotot said,

    April 23, 2012 at 9:05 pm

    It seems the administration could save a lot of money by not getting such analyses by useless management consultancies. Nothing new here at least…

  2. spannaldehyde said,

    April 23, 2012 at 10:00 pm

    Insight Cube™ technology? /o\ I picture someone gazing into a crystal cube, and wonder if it has any relation to Time Cube…

  3. merelyuseful said,

    April 23, 2012 at 10:14 pm

    I got the data for my LA the other day but I haven’t got any further than verifying that Benford’s law fits the amounts. It’s turgid stuff and you have to figure out what the spend is by looking at the payee and figuring out what they do. There are a LOT of care homes. Maybe Opera only did entries labelled “Carphone Warehouse”.

  4. Alex said,

    April 23, 2012 at 10:16 pm

    So the people who make policy or the people who publish the stories or the government ministers are all as gullible as a 4 year old?
    No wonder the people with the money get to run this country, not that they do such a fantastic job of it.
    Common sense, integrity and honesty would probably save at least 20% from council budgets but that would require those attributes from everybody inside and those supplying services to the councils, including smoke & mirrors corporations like Opera Solutions I guess. Wondering how much they got paid for that bit of genius?

  5. Ben Goldacre said,

    April 23, 2012 at 10:19 pm

    As I understand it they weren’t paid in money, but received considerable publicity for their company, and valuable public endorsement of their service in a dedicated government press release, etc.

  6. pauldwaite said,

    April 24, 2012 at 8:51 am

    MAH INSIGHT CUBE™

    LET ME SHOW YOU IT

  7. MadPierre said,

    April 24, 2012 at 12:24 pm

    Sadly, this is typical of the calibre of consultants who ply thier trade to the Public Sector.

    I once managed a council’s procurement department and we moved all of our mobile phones onto the ‘government contract’, in about 2000. This was a centrally negotiated contract, organised by the government, and we saved a packet going there – probably around 20%.

    The government contract had, IIRC, price breaks in place, so everyone’s costs would fall at 1m users and so on – this is much greater buying power than you get on price comparison sites, and there was no middle man.

    I still work for a council and, as far as I now, all councils get their mobiles via the government contract, at the same rate as every government department, and have been doing so for a decade or more.

    I shopped around for my personal phone contract last year and could get something approaching as cheap, but certainly not cheaper.

    Generally, council staff need a phone to be contactable for short conversations, so inclusive minutes and texts don’t have much value. The big savings can be made on discounted monthly rental, low cost of entry level phone handsets and reasonable costs/minute for airtime.

    If the government are stupid enough to think this report has any credibility then they need to take their procurement people to task, because the government let the contract that most/all councils use.

  8. AdamJacobs said,

    April 24, 2012 at 1:00 pm

    Dodgy statistics indeed, but the headline conclusion that local government wastes a lot of money seems reasonable, and biases in the estimate could easily go in either direction.

    The figures presumably assume that local government savings can only be made by doing the things local government already does more cheaply. But what if it stopped doing some things altogether? I suspect there are quite large parts of local government activities that it doesn’t really need to do at all. Would the world really come to an end if we were no longer able to call on the services of an Equality and Community Cohesion Officer from our local council when we felt the need?

  9. stinkychemist said,

    April 24, 2012 at 10:07 pm

    I’m just naturally suspicious of anything that uses “leverage” as a verb. It usually indicates the worst kind of idiot advising the most gullible.

    Sadly, I have no empirical evidence to back this up, only skepticism, supposition and hearsay. This opinion is therefore as valid as anything in the “Opera Solutions white paper.”

    Please submit my payment immediately.

  10. matt59 said,

    April 25, 2012 at 11:15 am

    They admit that their data is bollocks in the following paragraph:

    /*
    Lack of Data

    Although local government spend information is now being published, there are, as yet, few mechanisms to consolidate and compare spend data within organisations and across them. Without detailed comparable analyses, opportunities for spend leverage cannot be identified, proven, or acted upon.
    */

    i think they may have failed to indentify and prove opportunities for spend leverage

  11. dkoetsier said,

    April 26, 2012 at 3:26 am

    I think this looks like expectation bias. If you anecdotally believe that local governments are inefficient you are willing to accept whatever Opera Solutions is singing about.

    BTW, it is possible to use the word leverage and still not be wrong – I saw it once… OK I hear about it… OK I think it might be possible… no, your right, they’re dolts.

  12. dvavasour said,

    April 26, 2012 at 11:13 am

    I wish I didn’t come across this sort of “analysis” in my day job. The saddest thing is that the people who produce this sort of garbage believe it’s trenchant and insightful. You or I would write this as a spoof, sprinkling it with buzzword fairydust: they genuinely believe that “leveraging knowledge” is both new and a silver bullet.

    The real scandal of the SPADs is not the cost or the misconduct, but their gullibility to this sort of tripe.

    OTOH, perhaps I should set up a government workwear supplier using new smart fabrics whose opaqueness is regulated in proportion to the intelligence of the beholder…

  13. Dr_MC said,

    April 27, 2012 at 3:11 pm

    Bit harsh on 10 year olds, is it not, Ben?

    Frankly, the more I read of your site the more depressed I am. Or is it encouraged? I suppose knowing the guff that gets pubished, publicised and taken as gospel means that surely my well conducted yet “unsexy” research should also get pulished?

    Anyone?

  14. julianscox said,

    April 29, 2012 at 6:19 pm

    I remember this post from last year, which makes it an opportunity to bash the drum of populist left beliefs. As usual the British press and readership enjoy their own assumptions about others. Everything I have read today feels like a manipulation of the facts to the ends of the few, be they right of left in ideal. It would be pleasant to read articles where political policy was based on facts. I rarely enjoy such an article. It is always the class system polarising the conversation for the readers viewpoint. The class system is maintained by those who wish to end it as much as those who have the fortune/fate to have been born with a silver spoon in their mouth.

  15. hesfes said,

    May 1, 2012 at 12:05 am

    As Opera Solutions say themselves in the blurb on their website, under the section JOIN US:

    “Opera Solutions is a diverse and dynamic place to work. Our scientists, software engineers, sales force, consultants, and technology professionals are comfortable with ambiguity, … ”

    Say one thing for them, they’ve taken that word to a massive new height of irony!

  16. anyachaika said,

    May 13, 2012 at 8:56 am

    It will be interesting to see what information emerges from the Freedom of Information request that can be seen at – www.whatdotheyknow.com/request/childrens_therapy#outgoing-196878

    An exclusive interview with Edzard Ernst can be seen at- invisibleengland2.wordpress.com/2011/12/08/interview-with-professor-edzard-ernst-by-invisible-england/

    The first hand account of the treatment is at – invisibleengland2.wordpress.com/2011/09/21/first-hand-account-of-holding-therapy-in-the-uk/

  17. jgrellier said,

    May 15, 2012 at 6:23 pm

    The graphic on the front page of the “report” looks like something from the Chris Morris stable. That would appear to be the only thing going for it.

  18. BenHemmens said,

    May 19, 2012 at 5:03 pm

    Insight cube?

    I’ve had deeper insights on a cubicle ;-)

  19. arora496 said,

    June 9, 2012 at 4:17 am

    techappxpert.blogspot.in

  20. login222 said,

    June 14, 2012 at 9:08 am

    The graphic on the front page of the “report” looks like something from the Chris Morris stable. That would appear to be the only thing going for it.

  21. rorschach said,

    July 6, 2012 at 10:31 am

    First impression? The designer who came up with the cover is a Trekkie obsessed with the Borg.

    Second impression? If one of the students I teach showed me this … after finishing sighing and wondering, once again, about just how far educational standards have fallen in this country – I’d reach for the red pen.

  22. landbound said,

    September 6, 2012 at 10:29 pm

    It’s simply a piece of marketing for Opera. And as a piece of marketing for Opera, it’s a bad one. The brochure is clearly laughable and yet, contradictorily, not funny.

    20%? A ridiculous extrapolation from their own partial, so-called ‘data’. And anyway, everyone knows that 86% of statistics are made up.

  23. London Skeptic said,

    September 10, 2012 at 11:23 am

    Insight Cube! I must get one of those.

    Even the mobile phone savings would involve extra employees to monitor and analyse all mobile phone usage and attempt to constantly update each account to the most efficient payment plan.