1st May 2009
By David Williams
Whitehall officials have ‘too cosy’ a relationship with contractors and are not paying enough attention to making sure they provide value for money, MPs have found.
An inquiry by the Commons Public Accounts Committee concluded that departments were placing more emphasis on letting a contract than managing an ongoing one. It also found that the government was unable to measure and influence the performance of suppliers.
Committee chair Edward Leigh said: ‘The National Audit Office estimates that as much as £300m could be saved each year if contracts were managed better. It is a disturbing finding that, where services being supplied are substandard, nearly 40% of departmental contract managers choose not to apply financial penalties to the supplier, even though they are entitled to do so.’
He added that, as pressures on public finances increase, ‘it cannot be countenanced that opportunities for saving money are being missed in this way’.
The PAC recommended that departments give responsibility for contract management to a single individual. Less than half of government organisations currently do so. The MPs also found that only 41% of managers had tested the value for money of services purchased under an existing contract.