Book Description

Government spends £187 billion on goods and services with third parties each year, around half of which is estimated to be on contracting out services. Recent scandals illustrate the failure of some contractors to live up to expected standards. These include the news that G4S and Serco had been overcharging the Ministry of Justice on their electronic tagging contracts for eight years, including claiming for ex-offenders who had actually died - and the complete hash that G4S made of supplying security guards for the Olympics. These failures have also exposed serious weaknesses in the Government's ability to negotiate and manage contracts with private companies on our behalf. The Committee calls for three basic transparency measures: the extension of Freedom of Information to public contracts with private providers; access rights for the National Audit Office; and a requirement for contractors to open their books up to scrutiny by officials The four private contractors the Committee met - G4S, Atos, Serco and Capita - all said they were prepared to accept these measures. An absence of real competition has led to the evolution of privately-owned public monopolies which have become too big to fail. Small and medium enterprises (SMEs) have been crowded out by the complexity of the contracting process, excessive bureaucracy and high bidding costs. Government should require higher ethical standards of private providers than have sometimes been displayed in the past. For example, Departments should ensure their contractors have proper whistleblowing processes in place.