InCredit

LIKE MOST FOLK, I was a little jolted by the recently published figures showing Britain's GDP going into reverse. However, I'm not getting overly worried.

The service sector makes up about 75% of the UK economy, and bad weather at the tail end of last year definitely affected Britain's ability to function. We all saw it with our own eyes.

January is back to normal, weather wise, and with other major economies like Germany and the USA registering positive GDP growth , I think we'll follow suit in the 1st
quarter of 2011, thus avoiding an official double dip recession.

If I'm wrong, there will be some serious reassessment of Government tactics. Yes,
there will have to be some short term pain with regards to unemployment, insolvencies and consumer confidence......economic pundits expect all that.... but a return to recession, when other countries avoid it, will heap some very unwelcome pressure on George Osborne and his Coalition colleagues.

ACCOUNTANCY AGE STAFF have not been the only journalists to cover the story of Romanian witches laying curses on politicians who had planned to tax their earnings from January 2011.

Apparently, in a superstitious land like Romania (pictured - a castle in Transylvania. Sorry, ed.), these threats and curses are not to be taken lightly! Witchcraft still plays a part in modern society, and I was reminded of this fact a couple of years ago while at an international debt collection conference.

A representative of a global credit insurance organisation and debt collection agency was giving a speech on how best to collect debts in French West Africa. Many exporters brave enough to ship to that part of the world on open credit terms would naturally turn to a local law firm to help chase outstanding debt down...but they'd be barking up the wrong tree we were told.

The best way of retrieving debt in French West Africa is to seek out the local witchdoctor to the debtor. A few words from him will undoubtedly persuade the debtor to cough up, as the person concerned would be much more worried about the powers of a witch doctor than those of a suited lawman!

FOR THOSE OF US that can forgive and forget Germany's 4-1 trouncing of England in last year's World Cup, doing business with our German EU partner may spell good news in 2011.

Data from the Federal Statistical Office just released in the last couple of days show that Germany is the place to trade nowadays. Domestic investment in machinery last year was up nearly 10%, fuelling better than expected GDP growth figures. Domestic as well as healthy export growth led to the Germans posting a 3.6% rise in GDP in 2010 - far better than many of its western European neighbours.

Not only that, but trading with Germany is getting far less risky too. Federal insolvency statistics released this week for the period January to October 2010 showed business insolvencies numbering 26,966 - a year on year fall of 2.2%, but the decline in numbers is gathering pace; in October for instance, corporate insolvencies were down 12.8% on the previous October.

Gute Nachrichten!

IN JULY last year, the coalition government made it clear that to save frontline public services it would look to save billions through a more professional approach to procurement.

Well, things have certainly been hotting up nicely since then. Firstly, in August, Cabinet Office minister Francis Maude (pictured) appointed John Collington, the Home Office's Group commercial director, to head up procurement in the newly-formed Efficiency and Reform Group.

Then, in October, Sir Philip Green, Top Shop owner, criticised government departments for poor procurement management and wasting taxpayers money. Next, we saw the Cabinet Office arrange a summit with 31 of the government's leading suppliers with the intention of delivering the message that the "government will no longer offer the easy profit margins of the past".

Memorandi of Understanding have been signed with many large suppliers to save money and to buy from them as a single customer. Just before Christmas, it was announced that Xerox and Vertex had just signed up to cost-saving agreements.

Pressure continues to mount on the government to put its procurement house in order, but also on its suppliers, who, let's face it, must have benefitted substantially from amateurish purchasing by public bodies over a long period of time.

Only this week in the Times, another insider revealed that the NHS was probably wasting a billion a year on procurement, apparently, it was discovered that eight Trusts were buying the same pacemaker for 19 different prices- some wasting up to £750 on each one.

While this all spells good news for taxpayers, I just wonder how much pressure will be exerted by large powerful suppliers on their own suppliers down the line if profit margins get squeezed by more professional Government procurement measures?

Serco was one of the companies involved in the recent summit meetings with the Cabinet Office to reduce costs, and look what they tried to do in response to the threat- sent letters to suppliers asking them to accept a retrospective annual rebate on spend.

However, no taxpayer should criticise the government for doing what it is doing- trying to cut waste has to be applauded, especially if the result is less cuts to frontline services.