A Domesday Book for public service contracts – better data, better value for money

The collapse of outsourcing giant Carillion has come to symbolise the bankruptcy of the privatisation dogma. The TUC’s urgent call for a government task group to protect jobs and services was met. But one year on, it is all too clear that many workers and communities paid a high price. Taxpayers footed a bill of over £150m, hospital building works were delayed by months, suppliers went unpaid, jobs were lost and thousands more workers saw cuts to pay and pensions. We can’t afford another disaster like Carillion – lessons must be learned.

The government has now announced a review of its outsourcing policies and practice. They should listen to unions and communities who know all too well the impact that years of low-cost, high-volume outsourcing has had on public services and those who provide them.

In this report, co-authors John Tizard and David Walker kick-start this debate with some proposals for what the government needs to do now. The TUC is happy to give their ideas a platform.

Carillion was a particularly poorly managed company. But a large slice of outsourced public services remains in the hands of companies that share similar characteristics. Large, opaque and complex conglomerates, lacking in specialism yet driven to accumulate ever-increasing public service contracts in the pursuit of maximising short-term shareholder value. As austerity bites, commissioners bear down on prices while the contractors find savings by increasing the squeeze on their workforce and suppliers. And too often, service quality suffers.

The system is in urgent need of reform. Commissioning decisions should be based on a public interest case that puts quality and accountability first. The TUC believes that publicly owned and accountable services are the best way to promote that public interest. But where services are put out to tender, contracts should be designed to maximise social value, including decent pay, terms and conditions for the public service workforce. And contractors receiving public money should be obliged to act in the public interest.

Transparency matters too. If we are to achieve a step change in the way we design and deliver our services, improve contract management and put the public interest first, we need hard data. But the lack of information available across the public sector is alarming.

Since 2015, there have been some modest improvements. But currently, there is still no way to bring together contract information from across our public sector, from central to local government, NHS and devolved administrations. FOI requests and the use of private consultancies get you so far, but the picture remains largely hidden. The government should take responsibility and let taxpayers know exactly how much of our money goes to private service providers, who it goes to and what value we get for it.

We hope this report contributes to a much-needed and timely debate. But more importantly, that it helps the government take the action we need to shine a light on a public service outsourcing industry that has evaded proper public scrutiny for too long.