Devon firms urged to cut procurement fraud

Businesses in Devon are being urged to do more to reduce the hundreds of millions of pounds lost to fraud in the county each year.

With procurement fraud now recognised as the second most frequently reported form of economic crime, analysis of figures from the National Fraud Authority carried out by Devon-based blur Group, reveals that £126m a year is lost to fraud by businesses in the county, including £52.6m to procurement fraud.

The scale of the wasteful spend means firms are less profitable, have less money to invest in their business and are at risk of losing out to competitors who are already tackling the problem.

A new resource, The South West Business Guide to Eliminating Waste, is being made available to local companies to help tackle the problem via getguide@blurgroup.com

Philip Letts, CEO of blur Group, whose cloud software and managed services platform helps companies eliminate waste and inefficiency in their procurement processes, said: “The figures are shocking. And of course, as well as companies wasting millions of their own potential profit, a major aspect of procurement fraud also falls within the public sector which means taxpayers’ money is potentially being wasted, too.

“Yet what I find encouraging is, since we moved our head office from London to the South West two years ago, we’re now working with a range of companies and councils in the region who are increasingly focused on tackling the problem, including using blur’s platform to reduce their procurement waste. But clearly wasteful spending remains a huge issue that organisations would want to address, be it inefficient processes, rogue spenders, deliberate fraud or failure to get the best price.”

Devon-based companies using blur’s platform include construction firms, solicitors, local authorities, South West Water, the GAIN network operating from Plymouth University, ServiceMaster in Newton Abbot, Coastal Recycling and Lead Lab in Exeter.

Across the region, latest figures reveal that £312.2m was lost by businesses and public sector organisations to procurement fraud in 2013. Devon topped the South West procurement fraud ‘league table’, losing £52.6m, Somerset £41.3m, Dorset £33.7m and Cornwall and the Isles of Scilly £21.2m in 2013.

Richard Adams is Corporate Projects Manager at GAIN, the Growth, Acceleration and Investment Network founded by Plymouth University.

He said: “It is without doubt a major area that businesses need to address. We work with our members to help their businesses grow, and being as efficient and effective as you can be is one of the very best ways of succeeding. We’ve linked up with blur Group’s platform to do that ourselves as an organisation and are now encouraging our members to adopt an equally rigorous approach.”

South West firms are using blur Group’s platform to trade with companies locally as well as globally. Of those South West companies using the platform, 59% are doing business with firms within the region. And 41% are using blur’s platform to identify opportunities beyond the South West, boosting inward investment.

Andrew Garman, Director at ServiceMaster Clean Devon, of Newton Abbot, said: “It’s all about being as efficient as possible. We wanted to find the best way to promote our business and generate more sales so we used blur’s platform. Most importantly, blur Group managed the entire project, sourcing a provider, co-ordinating with the preferred supplier on our behalf and managing payments and the delivery.”

blur is celebrating the second anniversary of its move from London to the South West. It was the first company to locate to the new Exeter Science Park, near the M5 and Exeter Airport. Through its combined cloud software and managed services platform, the firm provides a single source for the delivery of business services. Sourcing, shortlisting support, contract and project management, payment processing and reporting are available within blur’s solution.

The firm’s online global marketplace has over 65,000 vetted service providers who offer everything from marketing and technology to professional services. The platform is used by multi-nationals and major companies including Argos, GE and Danone, with some firms outsourcing the majority of their procurement process to drive efficiencies, and others using it for spot purchasing of specific services.

Jon Hogg, Chief Marketing Officer of blur Group added: “In tough markets, companies need to do all they can to remain competitive. Business leaders will be looking at their budgets for next year and it is absolutely vital that they should be proficient at eliminating waste internally in the services that they buy and the suppliers who they use.

“It’s accepted that some 20% of all spend by organisations is unmanaged and un-contracted. This is an incredible amount vulnerable to wastage and fraud, but it also has the potential to be tackled.”

Free copies of The South West Business Guide to Eliminating Waste can be ordered via getguide@blurgroup.com