Throughout 2012 and 2013, we have seen an increasing litany of press reports, official enquiries and more recently Serious Fraud Office and police investigations on high-profile public service outsourcing contracts and contractors.
From the Olympic Games security staffing to the Ministry of Justice tagging contracts to prisoner transport and GP services contracts – some big issues and questions have been raised. In addition, there has been the failure of the Work Programme, and in particular the harsh impact of ‘payment by results’ driven supply chains on specialist voluntary and SME providers, and the numerous reports on the performance, service and culture of DWP medical assessments. In the case of the latter contracts, candidly, the reported experience of service users has often been ‘chilling’.
So what has gone wrong? The various enquiries, reviews and investigations will hopefully provide some answers.
Where there has been any criminal behaviour (and we have to await police and court decisions to know to what extent this has happened), there can be no excuse. Contractors must be held to account and corporate as well as individual responsibility should apply.
However, it would seem that in many of the cases cited above and in many others, the failure and the problems cannot simply be laid on the contractors. Procurement, clients and client managers have to take responsibility too. When it outsources a service, the public sector cannot outsource or abdicate its responsibilities and accountabilities for performance and the use of public money. The high-profile cases that have made the headlines in the last twelve months or so have exposed some serious misjudgements and failures by the public sector as procurer and client. They have also raised serious questions about the systems, ethics, motivation and behaviours of some contractors too.
The Government is actively engaged in developing the quality and capacity of public procurement in central government and its agencies. Across local authorities, the quality and effectiveness of procurement and client contract management inevitably varies, as it does in other services such as the NHS, police, and fire and rescue. Undoubtedly, there is a need to enhance procurement and client contract skills and expertise. The Institute for Government in its report ‘Making Public Service Markets Work’ this summer called for a greater professionalism of the public procurement service. However, this will not be enough.
There is a growing case being made and gaining resonance about the appropriateness of public service outsourcing and the contribution that it can make. This debate is very important.
Meanwhile, in addition to improving the quality of the commercial, procurement and contract management capacity across the public sector it seems to me that there are eight measures which the Government should consider enacting immediately.
These are:
- creating a national register of all public service contracts and contractors with contracts above an agreed threshold so that data on their performance, etc can be monitored across all their contracts and available to all procuring bodies
- requiring all public bodies to publish their ‘business cases’ and rationale for pursuing outsourcing with a period of time between publication and enactment to allow for stakeholder consultation, challenge and representations
- requiring all contracts, contractors and client functions and processes to be open to political scrutiny by Parliamentary Select Committees and local authority scrutiny
- introducing a system of performance management – both operational and financial – for all significant contracts with transparency and easily accessible information and independent audit
- extending the Freedom of Information Act to all public service contracts, contractors and procurement/client functions (with minimum safeguards to protect competitive processes around tendering periods)
- giving individual service users the right to challenge performance and require the public sector client to respond publicly to issues and complaints after having, where necessary, undertaken objective investigations
- extending the statutory ‘right to challenge supply’ for staff and voluntary/social sector organisations to offer to take over managing outsourced services and not only those provided by the public sector
- requiring all contractors to publish details of ownership, governance, senior remuneration, any corporate criminal convictions and all external inspection reports on their contracted public services
If the Government and wider public sector is going to pursue more outsourcing, and no doubt it will (there will be questions about the pace, scope and degree of public service outsourcing but not, I believe, a cessation), then there must be greater transparency and accountability and enhanced official and political competency.
Ultimately, a decision to outsource a public service is a political act. All political acts require authorisation, and to be sustainable have to be underpinned by public confidence. The headlines and horror stories over the last year or so have seriously dented any remaining confidence. Government has to act decisively or its own policy goal will be even less popular; and deliver less well.