Progress on contract transparency stalled

9 November 2015
The Cabinet Office appears to be failing to meet its commitments to boost transparency around public sector contracts, despite saying six months ago that it had given the green light to trialling and adopting a new standard transparency clause for government contracts. Chris Wajzer explains.

In March this year, the Institute for Government set out recommendations for enhancing transparency in public service contracts. We proposed a set of standard transparency provisions that would compel suppliers to publish top-level information about contracted services, such as the fees charged to government and headline performance indicators.

The then-Cabinet Office Minister Francis Maude committed to trial and adopt a version of these provisions as part of the Government’s broader transparency commitments, under the Open Government Partnership National Action Plan  and its own principles to enhance transparency. Despite these intentions however, little appears to have happened in the last six months in the way of tangible progress towards this commitment.

The most recent public update on progress against the National Action Plan states that an “updated draft transparency clause has been circulated for consultation across Government and to civil society organisations with a view to implementing it for government contracts by October 2015”. That deadline is now up and, despite consulation taking place, no public announcement has been made that a trial is being implemented.

Government cannot afford to risk further delay. While both in-house and outsourced services have enjoyed their share of successes and failures, recent high-profile problems such as the Serco and G4S tagging scandal have undermined public confidence in outsourced service provision. They have also brought in to question the Government’s ability to manage these contracts.

We know that only a fifth (21%) of the public trust the private companies to which government contracts have been outsourced, while some 60% think the Government fails to regulate outsourcing companies adequately. Proactive publication of regular, top-level information about the performance of contracts is a simple and low-cost way to inject more transparency, and therefore trust, into outsourced service provision.

This comes at a time when outsourcing has become increasingly central to the provision of public services in the UK. The National Audit Office estimated that across the public sector, £187bn was spent on goods and services from third parties in 2013. And, if the past five years are anything to go by, the use of outsourcing looks set to increase.

A recent Financial Times article highlighted that the amount of government money spent on outsourced public services almost doubled during the 2010–15 Coalition Government. This trend is likely to continue. The Prime Minister’s recent ‘smarter state’ speech signalled a desire to inject more competition into public service delivery and the imminent Spending Review announcement will likely be another step in this direction.

There are also broader implications of failing to meet this commitment. To date, the UK Government has been the world leader in building an open and transparent government. Transparency continues to be lauded as a central pillar of public service reform here in the UK. Like Maude, the current Cabinet Office Minister, Matthew Hancock MP, appears a keen advocate of transparency – a point he reaffirmed at a recent IfG event.

But the UK now risks complacency. Delay in implementing the transparency clause may be no cause for immediate alarm but without regular pressure, timelines will continue to slip and important projects like this will find their way to the back burner, where they may remain indefinitely.

If the UK is to retain its world leader status it must do more than talk about principles. It must continue to implement the tools, mechanisms and platforms, like the standardised transparency clause, that enable everyone to better scrutinise outsourced service provision. Hancock’s silence on this issue – in contrast to his support for transparency in general – could well be due to the imminence of the Spending Review. It is to be hoped that we will see a new injection of pace into this agenda immediately following the Chancellor’s announcements on 25 November.

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