21.11.18

Major public-sector suppliers to draft ‘living wills’ as part of post-Carillion outsourcing approach

All major public services providers will have to draw up ‘living wills’ determining what would happen if they go bust as part of the government’s post-Carillion approach to outsourcing.

Central government will begin piloting this approach with five key suppliers to the public sector – Serco, Capita, Sopra Steria, Engie and Interserve – with others set to join in the weeks to come.

Speaking at the Business Services Association’s annual chairman dinner this week, Cabinet Office minister David Lidington said that Carillion – which went bankrupt earlier this year, resulting a major ripple effect across the public sector – was a complex business and, when it failed, government had to step in. But it did not have the “benefit of key information” that could have smoothed the management of the liquidation.

“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,” explained Lidington.

On the five pilots, the minister said each of the firms that have stepped forward delivers critical public sector and, by leading the way in the use of living wills, will provide the public and civil servants “with the confidence that they deserve.”

Going further, the government will also be strengthening development programmes to help officials get procurement right from the get-go.

“We are professionalising our contract management through accreditation of all government contract managers and from today an estimated 30,000 civil servants across central government will have access to new online contract management training,” noted Lidington.

When Carillion collapsed this year, several councils, NHS trusts and transport organisations went into overdrive, with several contracts left unfulfilled and buildings left unfinished. New research later revealed that local government now has a “declining appetite” for outsourcing, with just 15% of council leaders saying they plan on outsourcing more over the next two years.

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