Laura Sharman 05 March 2014

CBI calls for more transparency in outsourcing contracts

CBI calls for more transparency in outsourcing contracts image

The CBI is calling for new measures to boost ‘transparency and accountability’ in outsourced public services contracts.

The business group said the proposed measures for private and third party managed contracts would also help the Government reduce the deficit and boost the economy.

The CBI is calling for every government contract to be published online as long as the customer approves, and for every contract negotiation to discuss how to release information proactively with a presumption in favour of open book accounting.

It also said the National Audit Office should be given the power to audit government contracts with the private sector.

John Cridland, CBI director-general, said: ‘The public services industry is a great British and international success story. Not only has it helped the UK public sector lower its costs while improving services, it’s also an important fast-growing part of our economic renaissance, contributing tens of billions of pounds to our economy.

‘But public services businesses recognise that they operate in an industry which rightly demands close public scrutiny, which is why we are unveiling a range of measures to boost transparency and accountability.

‘We can’t ignore the fact that confidence in the sector has been badly hit by several high-profile failures and that it will take time and meaningful change to rebuild it.

‘That said, we must not let anti-business rhetoric tar the public services industry as a whole, because the UK needs the expertise, investment, growth and job creation which these innovative firms bring to our economy.’

Cat Hobbs, director of We Own It, welcomed the measures but said the public must be given more say in decisions to outsource contracts in the first place.

She said: 'It's great to see the CBI pushing for more transparency in public service contracts. But it's not just about information; the people who use public services must have more say over what happens and whether they get outsourced in the first place. In the 21st century, organisations which put people first – like the public sector and not for profits – are better placed to deliver high quality services.

'As the CBI acknowledges, there have been major failures in the outsourcing industry, from the Olympics security scandal to taxpayer fraud in tagging contracts. Surveys show the British public rejects default privatisation by 10:1.'

The Government spends £187bn a year with 200,000 private firms managing public services, which contributes £48.7bn to the economy.

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