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NAO issues memorandum on the role of major contractor in the delivery of public services
Trowers Public Insight

NAO issues memorandum on the role of major contractor in the delivery of public services

Earlier this week, the National Audit Office (NAO) issued two memoranda on its website challenging the government and private sector contractors to work together more effectively and address the issues behind what they perceive as the current crisis of confidence in contracting out public service.

The NAO has estimated that contracting out (for both "back-office" and "front line" activities) accounts for approximately half of the £187 billion that the public sector spends on goods and services each year. Whilst recognising the benefits of contracting out such as reform of service delivery and improving value for money, the NAO has called for better public scrutiny of areas such as poor performance, irregularities and misreporting and the limits on transparency over contractors costs and profits.

The momorandum on contracting focuses on the role of some of the bigger contractors in public service delivery and asks three questions:

  • Is there sufficient competition in contracting-out services;
  • Can they see whether contractors' profits reflect a fair return;
  • How can they know whether contractors are delivering.

The second memorandum, "Managing government suppliers" covers the Cabinet Office's progress in improving how the government manages its relationship with 40 major contractors throught its strategic suppliers programme. Both can be accessed at the link below:

http://www.nao.org.uk/report/memorandum-role-major-contractors-delivery-public-services/

Clearly the issues raised in the memoranda will stimulate views and debate from both sides of the table and it will be interesting to see how the sectors can work together to overcome public perception. In our experience, local authorities are increasingly driving a much harder bargain when contracting with the private sector and contractors are becoming accustomed and understanding of the transparency agenda that is being driven forward. However, as with all major public sector projects, there is always scope for new ways of working and it will be interesting to see how this develops further.

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