As Chair of the Public Accounts Committee I have been conducting an investigation into the collapse of Carillion and I recently told Parliament: The system is broken.
There are not enough suppliers bidding for contracts across whole swathes of Government, and the system is skewed against smaller, specialist businesses that get work only as part of a longer supply chain.
At each stage, margins are squeezed, and too often we see poor service, sharp practice and an unnecessary cost to taxpayers.
Shockingly, there remains in government a shortage of the necessary skills to let and manage contracts. Quite simply, the Government is not a clever client, and taxpayers and small businesses are losing out as a result.
If a Government contract is failing, it is still difficult for the Government not to award other contracts because of contract law, and we think that area needs to be looked into.
In any other situation, it would be crazy to give a contract to a supplier that was clearly failing. Given the size of these contracts, few organisations are bidding, and that means that some organisations are running huge swathes of Government and have effectively become proxy Departments, even though they are in the private sector.
Worryingly, it means that the Public Accounts Committee and other Select Committees do not have the same oversight of them.
When taxpayers are funding something, commercial confidentiality needs to be treated very differently from when private companies are doing business between themselves.
Taxpayers’ hard-earned money is handed to the Government to deliver a public service, and when companies do not deliver, we need to see that very clearly and the Government should not be afraid to call it out.
The Public Accounts Committee has agreed that we will look closely at the nature of the relationship between the Government and their strategic suppliers, the Government’s approach to procurement and contractual management, and—of course—the impact on taxpayers and service users every step of the way.
The Public Accounts Committee has long raised concerns about the lack of transparency in large contracts funded by taxpayers to deliver public services.
Our concern, especially given what we have seen in the papers, is that secrecy can lead to a cosy relationship in which the Government are more focused on the interests of the supplier, because of the potential impact of the collapse of that supplier.
We can see those problems with other strategic suppliers in the papers we have received, and we will be calling them before the Committee, as well as those in government, to challenge them and to consider how this broken system can be fixed.