CBI urges improved outsourcing dialogue and collaboration

16 Dec 15

The CBI has called for improved collaboration between Whitehall and outsourcing companies to ensure efficiency is improved and savings are met.

In a report, the business group said improved procurement and contract management could help the public sector make the 19% savings in day-to-day spending needed following the Comprehensive Spending Review.

However, this requires more flexible contracts and a more collaborative approach to managing risk. In particular, the CBI said public sector bodies must be willing to have an “ongoing conversation” throughout the lifetime of a contract to ensure risk is distributed and managed fairly between the contractor and the supplier.

Such conversations require an open and honest approach, with the potential impacts of contract failure having been considered in advance, the CBI’s head of public services George McFarlane said.

“The best public service managers know that successful contract delivery goes way beyond signatures on a page,” he stated.

“In the previous Parliament decisions were made based on cost rather than transformation, which side-lined innovation and new ideas. This will need to change if the government is to create sustainable public services that remain within spending limits.”

In addition to improved contract management, the CBI called greater certainty over investment in outsourcing to aid innovation. Senior civil servants should strive to play a more active role in commissioning, directly guiding procurement and delivery of contracts.

This is the latest call for reform to government contracting and outsourcing practices, and comes after groups including CIPFA called for the introduction of “open book” accounting for the deals.

Outsourcing has been under scrutiny following a host of high-profile failures in recent years, including the revelation in 2013 that two firms – G4S and Serco – had billed the Ministry of Justice for millions of pounds worth of electronic tagging services that had not been carried out.

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