Government Still Placing Too Much Faith In Large Suppliers

Dec 11, 2014

The Parliamentary Public Accounts Committee (PAC) has published a report, claiming that the government continues to place too much trust in large suppliers.

In June, it was revealed that just 20 suppliers received the top 20% of money spent by central and local government in 2012 and 2013 – six of these 20 were IT firms.

The Government Digital Service (GDS) is currently trying to rebalance the number of large and small technology suppliers to government, aiming for 25% of all spend to go to SMEs by 2015.

Initiatives such as the G-Cloud framework are designed to open up the market to cloud SMEs, but there are many that feel there is still more work to be done to increase the competition and give smaller organisations a level playing field.

PAC Chair Margaret Hodge claimed that companies being paid for services by the taxpayer must have the highest ethical standards in their work, but too often, this is not the case.

“The case of G4S and Serco overcharging the Ministry of Justice for years on electronic tagging contracts was the starkest illustration of both contracts’ failure to work in the public interest and government failure to safeguard taxpayers’ money,” Hodge claimed.

“G4S apologised to us for getting wrong and Serco said the affair was ‘unacceptable and unethical; frankly, we are deeply ashamed of it.’

“We have examined similar cases where there are allegations of the misuse of taxpayers’ money. Serco’s altering of performance data on its contract for out-of-hours GP services in Cornwall is an unacceptable example.

“Two other G4S contracts have been referred to the Serious Fraud Office to investigate and another Serco contract has been referred to the City of London Police,” she added.

PAC claims that the government will not be able to achieve value for money with its contracts until it pays more attention to contract management.

“Working To Improve The Situation”

However, the Cabinet Office says that although more still needs to be done, it is moving towards improving the way the government procures.

In June, the Department claimed that over £200m has been saved by improving the government’s digital services.


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