Government announces ‘living wills’ pilot to protect public services

21 Nov 18

Government contractors have signed up to a ‘living wills’ pilot, aimed at ensuring contingency plans are in place if another company fails in the same way as Carillion. 

Suppliers including Capita, Serco, Sopra, Steria, Engie and Interserve have volunteered to complete ‘living wills’, Cabinet Office minister David Lidington told an annual event on Monday.

Carillion was a complex business and when it failed it was left to government to step in – and it did,” he told the BSA annual chairman’s dinner.

“But we did not have the benefit of key organisational information that could have smoothed the management of the liquidation”.

He added: “By ensuring plans can be quickly put in place in the very rare event of supplier failure, we will be better prepared to maintain continuity of critical public services, to minimise the potential impact on critical national infrastructure and to ensure a smooth transition to new service providers should the need arise.”

The wills are part of a range of packages the Cabinet Office says will “revolutionise government procurement”.

From summer next year government departments will be required to consider a number of social values when procuring services from private providers.

These include ensuring small businesses have access to contracts, increasing the representation of disabled people in the workforce and reducing the impact of services on the environment.

“We are determined to build a society where people from all parts of our county have access to the best public services,” the minister said.

Jon Lewis, chief executive of Capita, said: “Adopting ‘living wills’ underlines our values-based leadership and our determination to help protect the UK’s public services.

“I’m pleased with the way in which the government and industry are collaborating to build a suitable paradigm for government procurement and contracting.”

Rupert Soames, chief executive of Serco, said it was “pleasing” to see a shared vision for the delivery of public services.

He said: “We are now beginning to see progress being made in a number of areas – transparency, standards of behaviour, risk allocation, and ‘living wills’, which are designed to improve resilience of government contracting”.

Earlier this month, an event heard that the Government Finance Function helped save jobs after the collapse of Carillion.

In July, the public administration committee warned that a Carillion-style crisis “could happen again” unless the government changes its approach to outsourcing.

Carillion, which employed 19,500 people in the UK and was responsible for a host of buildings services across the public sector, started insolvency proceedings at the start of the year.  

The National Audit Office said in May that the collapse of the construction giant probably cost UK taxpayers around £148m.

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