Calls for greater transparency in public sector contracting are gaining momentum. This chorus for democratic accountability will grow.
These calls have been coming from many sources including The House of Commons Public Accounts Committee, the National Audit Office, trade unions, campaign groups and even the CBI and some of the major corporate sector public service providers.
I feel that the campaign for greater transparency, more disclosure and accountability is going to grow in strength and will make some significant gains before too long. It would be good to think that there would be some serious response from the Government over the next few months and firm commitments from all the political parties in their 2015 general election manifestos. I believe that some parties will make such a commitment. In doing so, they need to be bold as the public has a right to full transparency not some redacted version.
Over the last year or so there has been a series of revelations of fraud and failure in a number of high-profile contracts and serious questions have been asked about some of the most dominant contractors in the outsourcing market.
The recent termination of the Atos contract with the Department for Work and Pensions (DWP) for the operational delivery of Work Capability Assessments was shrouded in darkness. Both commentators and those actively involved in public policy and with public services called for the publication of the contract termination agreement as well as details of payments, penalties and performance over the period that the contract has been live. Unsurprisingly, neither the DWP nor Atos has been forthcoming with such publication and have simply issued relatively bland statements.
In this climate of worry about the nature, impact and spread of public services outsourcing as well as an increasing cynicism and declining public confidence in politics, public institutions and business, the case for transparency becomes ever more relevant.
I would argue that there should be the same level of transparency regardless of the sector public service provision comes from. Business sector providers should be as transparent as the public sector – and, for that matter, so should social sector and charitable providers. The arrangement should be simple: ‘if in receipt of public money to deliver public services, the requirement is that providers will be transparent and subject to full scrutiny by politicians, inspectorates and auditors such as the NAO and other external inspectorates and regulators, and the media.’
There is a strong case that every significant public service contract should be governed by some ground rules enforceable through the contract and, if necessary, through legislation. These should not be burdensome and should be proportionate to the monetary value or political and/or service sensitivity of the contracts and the service involved. They should neither be overly bureaucratic nor discriminate against SMEs, social enterprise or charity providers. There may be a case to suspend the publication of some information close to the start of a new procurement process but again this exemption must not be over-used to deliberately obfuscate.
These conditions, which I have advocated previously, would include:
· a public sector client being unable to withhold the publication of contracts or join venture details except in the most extraordinary circumstances such as national security, and even then these contracts should be available to the relevant Parliamentary committees and the NAO
· a requirement to publish audited and verified statements on contractor’s operational and financial performance, with access to relevant information, systems and personnel for the NAO, internal public sector auditors and their external auditors
· standardised accounting procedures and practices for ‘open book’ accounting including annual independent audit
· the publication of all financial flows between and within contracts and joint venture companies – so as to capture internal trading that outsourcing companies practice for support such as IT, consultancy and support services
· publication of details of supply chains and supply chain management, risk transfer and payments
· visibility of the ownership and company structures of all bidders and contractors
· the publication of employment, remuneration and tax policies and practices of all providers
· clear and regular reporting on the contract’s added social value
· providers being required to submit themselves to political scrutiny processes
· the Freedom of Information Act being applied to all providers and public sector commissioning, procurement and contract management
· a duty to appear before Parliamentary and council scrutiny bodies and to share information with them whenever requested – and to do so independently of their public sector client or partner
In addition, there should be obligations on public sector bodies that are contracting or considering contracting to:
· publish and consult with the public, staff and other interested parties on the business case for a proposed outsourcing in advance of the commencement of the procurement
· publish details of the contract and, where appropriate, the contractor’s supply chains, monitoring and management processes; and their interventions, especially if these might lead to financial penalties and/or contract variations (and to report on such penalties and variations)
· be transparent and disclose details of relationships between providers and decision makers/influencers in the public body
· publish regular reports on the costs of procurement, including the use of external advisors, and contract management for individual contracts
· the public and social and community sector being enabled to ‘challenge the right to supply’, even when services are already outsourced
Public service contracting is unlikely to go away so it is important to ensure that the public knows what is going on and that the providers and their public sector clients are held to account. If companies or others wish to bid for such contracts or if politicians wish to outsource, they will have to accept the ‘rules of the game.’
Calls for such transparency and accountability will be ever louder and government will not be able to ignore them. Indeed, I forecast major advances on this agenda in the next two years.