With public sector finances subject to increasing scrutiny and cuts, cost-effective procurement of good and services has never been more important. Yet many procurement managers in charge of purchasing conference call services – a key tool for meetings – may be completely unaware of new charges affecting the amount of money spent on these calls.
Kieron James, founder of free conference call service WHYPAY? and board member of the Federation of Communications Services (FCS) outlines these charges and explains how they could lead to unexpectedly high bills and can be done to avoid them.
In 2013/14, the UK public sector spent a total of £242 billion on procurement of goods and services – 33 per cent of total public sector spending. As the public purse tightens, there is a greater need than ever to avoid unnecessary spending.
Conference calling remains a popular method of holding meetings for public sector organisations, allowing several participants to dial into a call from different locations and save the expense of travelling to meetings.
While precise figures on the amount of money spent on conference calling will differ according to the organisation, Freedom of Information Requests offer an illustration of the average spend of some of the UK’s most important public sector organisations:
British Transport Police
The average monthly spend in 2014 was £1,696 per month, with an average 55,000 minutes per month of call time. The organisation also paid an annual charge of £34,560 for an online web meetings service.
Ministry of Defence
The average monthly spend in 2014 was £13,000, with an average of 600,000 minutes of call time per month.
New call charges
On 1st July 2015, Ofcom introduced charges for service numbers (numbers starting 084, 087, 09 or 118). Many of these numbers are used to dial in to popular conference call services and, since the changes, calls are now costing businesses and public sector organisations up to 95 per cent more. Despite this increase, there is little awareness of the change and its potential impact on budgets.
The average service charge for calling the 08 numbers provided by six UK conferencing services is now an additional 6.64p per minute. Since Ofcom made its announcement, some mobile providers have also significantly increased their access rates – 02 has raised its access charge from 25p per minute to 45p per minute with other mobile phone operators charging a similar rate.
Research into conference call service providers using service numbers shows that the average charge for a 40 minute call will now cost £11.31 from a mobile or £6.16 from a landline.
The lack of awareness of these new call charges, means public sector organisations, who are under increasing pressure to keep costs down, may face an unexpected bill when dialling into a conference call and, as a result, be over-spending by thousands of pounds per year.
Looking at alternatives
With service charges rising for conference call numbers from some of the UK’s most popular providers, many organisations may wish to consider other options. In the digital age, there are more efficient and cheaper services available to public sector organisations looking to change provider, many of which are run by smaller technology SMEs rather than larger corporations.
In March 2011, the government set out a target of 25 per cent of public sector procurement spend to be awarded to SMEs either directly or indirectly. In August 2015, Minister for the Cabinet Office Matt Hancock announced that target was being increased to 33 per cent.
However, while more has been done to bring SMEs on board, many technology SMEs are calling for a better understanding of what they offer.
A recent survey by leading technology association TechUK looked into the issues holding back government from building a strong and rich ecosystem of technology excellence in the UK. It found that 96 per cent of those surveyed thought that Government should be doing more to improve SME’s supply chain experience along with a widespread concern that public sector commissioners are not making sufficient use of all the tools at their disposal. 86 per cent of SMEs said that civil servants need to make more of the Digital Marketplace and there was a lack of awareness.
While the government’s efforts to engage with SMEs should be applauded, more must be done to make it easier for smaller firms to do business with the public sector as ultimately more choice will help with cost savings.
Improving awareness and choice
Conference calls remain an ideal way to conduct meetings and save money on travel expenses. However, there is an opportunity to save even more money and greater awareness of the new call charges is needed so that public sector executives can make a more informed decision about the services they use.
An improved understanding of the ever expanding range of services offered by technology SMEs in this area is also fundamental in order to increase choice and facilitate cost efficiency.