Selling off surplus government equipment

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WilliamO WilliamO
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Selling off surplus government equipment

The Government announced last Friday (10th September) that it intends to implement a proposal “for an online auction site to sell off surplus and second hand Government equipment”. This will inevitably include – given the pending public service job cuts – a very large volume of office furniture. The sale of such furniture would generate a tiny amount of money, as values of second hand office furniture are already very low, but it would be yet another nail in the coffin of the office furniture manufacturing industry in the UK.

Office furniture manufacturers have experienced (and continue to experience) the most severe market contraction in living memory: sales have dropped by anything from 30% to 50%, depending on the precise sub-sector. Numerous companies have already gone into administration and those that have survived so far have had to implement major cutbacks and significant redundancies. Many, if not most, are still losing money and margins are wafer thin. The industry is already fighting cheap imports from Eastern Europe and China and facing further major reductions in public spending on new office furniture. The last thing the industry needs – just when there are some tiny signs of an upturn in business – is the government providing a huge new source of cheap office furniture. Think it through: when government offices are closed – as they will be – what is the most obvious, and highest volume, category of equipment that becomes surplus? By making large quantities of the resulting used office furniture available direct to end users, not only would office furniture manufacturers lose sales, so would all the office furniture retailers, the whole distribution structure. And if retailers fail as a a result, the manufacturers own ability to sell is correspondingly reduced. Then, after a relatively short time, the surplus government furniture will have been sold off or otherwise disposed of – but the UK office furniture industry could have been irreversibly damaged in the meantime, jobs lost and an increased proportion of future sales will go to imported products.

It makes a nice sound bite to take up a suggestion from a member of the public to sell off surplus government equipment – but insofar as office furniture is concerned it would cost the economy incalculably more – in terms of lost jobs and bankrupt businesses – than could possibly be gained by a short term sell-off generating minimal income. Much better to ship surplus furniture to developing countries that desperately need it and avoid an action that will damage hard-pressed UK manufacturers.