01.07.15
Government should know more about cost of outsourced public services
The government should know more about how much outsourced public services actually cost the companies who deliver them and how much profit they are making, according to a new National Audit Office report.
The NAO has called for government to negotiate greater access to, and make better use of, open book accounting data. An NAO survey found that the information is currently available in only 31% of contracts.
Based on public and private sector case studies, the NAO has identified five approaches to collecting and using information on suppliers:
- ensuring price complies with the contract;
- making better informed commercial decisions;
- assuring processes;
- maintaining control of risk; and
- achieving step-change innovation.
The NAO goes on to recommend that every major contract have a strategy for the collection and use of information and that every government department have a policy on when it will use open-book accounting. According to the NAO’s survey, only 23% of government organisations already have such a policy.
The report suggests that the Cabinet Office set up a taskforce to establish a common standard for open-book data, since suppliers complain that government currently asks for data in a variety of different formats. It also recommends that the Cabinet Office develop better guidance for interpreting suppliers’ costs and profits.
Amyas Morse, head of the NAO, said: “Contract management is not a desk job. We are reminded of this in all the best practice and the worst failures we see.
“For government to be accountable for contracted out public services; for it to understand its suppliers; for it to exercise oversight; and for it to promote value for money, it requires its contract managers to take a ‘hands-on’ approach and to go and see for themselves what their suppliers are doing.”
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