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New transparency rules for government contracts

Cabinet Office minister Francis Maude has set out plans to trial a new transparency clause in public sector contracts.

Setting out changes in response to an Institute for Government report that called for an increased openness, Maude said the government would work with suppliers to craft a "mutually binding contractual clause on transparency", and promised that all public sector contracts would in future be drawn up with "a presumption in favour of disclosing information" to the public.

"The presumption in favour of disclosure should apply to the vast majority of commercial information about government contracts, with commercial confidentiality being the exception rather than the rule," the government statement on its transparency policy states.

In a report published yesterday, Enhancing Transparency in Public Service Contracts, the Institute for Government outlines how private and voluntary sector suppliers to government could be required to publish important information about their operations and performance.

Maude said: “These align with our principles on transparency, and support our development of a transparency clause which will ensure that public authorities can make the necessary information on outsourced public services available to the taxpayer.

“We will trial a similar version of these provisions later this spring as part of our commitments under the National Action Plan with a view to adopting them once we have consulted across Whitehall.”

The new transparency clause will require suppliers to agree a schedule with government to release information to the public.

It will also open up all government contracts to audit by the National Audit Office.

Suppliers will also need to provide the Crown Commercial Service with financial updates at regular intervals throughout a contract as part of financial transparency, which will help improve government’s understanding of their costs, revenue and margins.

The Cabinet Office guidance said this will help government become a “principled, experienced and responsible customer” and it would not be looking to introduce burdensome reporting requirements.

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