Toggle high contrast

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

Report type
Research and reports
Issue date
Practical reform

Those are the objectives for reform. Here follows three actions to secure them.

Action 1

Improve data collection on outsourced contracts

The government recently assured MPs that it was on the case. [1] It is developing a contracts ‘playbook’, bringing together multiple sources of ‘actionable information’. The Cabinet Office, which houses the Infrastructure and Projects Authority (IPA) and Crown Commercial Service (CCS), can access contracts let by Whitehall departments and arm’s length bodies. And the Treasury recently established a unit to look at ‘end-to-end’ costs of decisions, which should encompass how services are delivered. This is welcome, if overdue, and it’s also doubtful that the Cabinet Office will seek information from outside Whitehall, from the NHS and local government.

This work could be accelerated and expanded by extending the Cabinet Office mobilisation over Carillion into a structured capacity to bring the CCS and IPA closer together and pool data. Other ‘joiners’ should include the government finance function, whose head, Mike Driver, recently claimed was doing more horizon scanning and becoming more proactive. [2] Intra-Whitehall collaboration could tap the data held by the Competition and Markets Authority, the Bank of England and Department of Business, Enterprise and Industrial Strategy, all of which monitor sectors, companies and markets. The IfG recommends the Cabinet Office collaborate with Companies House in requiring accounts to be submitted electronically and in machine-readable forms.[3]

Regulators could be pushed to do more. NHS Improvement and NHS England could acquire contract data through existing reporting requirements on trusts and commissioners. The then health minister Steve Barclay recently said “a modern health service shouldn’t involve 234 separate trusts spending time and money negotiating different contracts and prices for the same thing. That’s why our work to centralise how the NHS buys goods and services is crucial”.[4] A precondition of cost-effective contracting is the centralisation of data: how many firms, what prices, with what sort of record. After another contracting failure – this time over the disposal of clinical waste – the Cabinet Office, Environment Agency and Department for Health and Social Care said they were working together. Again, sharing data about contractors and contractors is vital.[5]

The CQC and inspectorates could insist on contracting data as part of their supervision of service quality.

The Cabinet Office is the UK point of contact for the devolved administrations and could work with them on a common template for reporting on contracts and contract performance. Much of the above is doable with existing staff numbers and functions. It would require more intense collaboration, always an issue in Whitehall (especially between the historical rivals in the Cabinet Office and Treasury). The attitude of the CBI to contracting information appears to have been changing. It could be enlisted to encourage companies voluntarily to share contracts data with the government.

But this voluntary (non-statutory) option is deficient. The Cabinet Office has traditionally been weak, relative to other Whitehall departments, especially the Treasury. Does it have the requisite ‘push’? As observed above, this option misses out local government and the NHS. Councils value their autonomy, but that has meant in practice they do not share even basic information with each other, let alone other levels of government. Historically the Cabinet Office has focused on Whitehall. Its relationship with councils and the NHS (in England) has been mediated through the departments sponsoring local government and health, which have not always been collaborative.

Action 2

A ‘Domesday Book’ for all contracts

A statutory body should be given power to wrest the information needed. If this were at arm’s length from central government, local authorities might be more willing to collaborate. They might nominate representatives to its governing board, along with representatives from the NHS, police and crime commissioners, arm’s length bodies and possibly the devolved administrations.

The size and cost of this new body are up for discussion. It could be funded through a levy on contracts, which might add marginally to the cost of contracting. It would be subject to Freedom of Information to encourage more contracts to be public documents, dispelling the suspicion that has grown up around contracting letting. The body might also absorb the Crown Commercial Service, making its expertise available to public bodies outside Whitehall.

It would not dictate to council or NHS trusts how to organise services and whether to outsource or not (and if so with which provider). But it would be proactive, trying to persuade public bodies to utilise its information about firms, markets and previous contract performance. Its target audience would be auditors, scrutiny committees and interest groups, as well as elected decision-makers and boards. These in turn would have to collect and curate data that is not presently visible, report during the life of contracts and publish assessments at their end.

It should maintain a ‘Domesday Book’ of all contracts on the outsourcing of services. This Domesday Book would record all contracts above the EU procurement threshold, details of contractors, contact values and performance data. The agency would use this date to issue analysis to the public sector on outsourcing, its impact and contractors’s performance and track record.

Action 3

Radical institutional reform

This option calls for a comprehensive restructuring of how public bodies achieve value for money, including in their use of contractors. The machinery concerned with securing value for money in public services would be completely remodelled following a re-examination of existing arrangements for public audit, scrutiny and accountability, especially those that function at arm’s length from democratically elected ministers and councillors. The Accountability System Statements inaugurated under the Cameron coalition has outlined areas of concern at academy schools and local enterprise partnerships. NAO reports have also found multiple instances of inadequate supervision of public money. [6]

After the demise of the Audit Commission, arrangements for supervising councils have been criticised, especially the silence of auditors as austerity has squeezed local budgets and capacity. Multiple, overlapping regulators are held responsible for equity and efficiency in the NHS, while the NAO’s remit has not been comprehensively reviewed since its establishment. The NAO has done vital work in adding to available data on outsourcing, but it has also been patchy. And only some of its reports are followed up by the PAC, which has a mixed record in securing its recommendations. Under this option, comprehensive questions would need to be asked about parliamentary scrutiny, probably going well beyond the inquiry recently undertaken by the PACAC.

A programme of radical reform might consider separating public audit from the pursuit of value for money. The NAO might become the audit supervisor for the whole public sector (in England) while a new agency – an Office for Equity, Efficiency and Effectiveness, perhaps – is charged with rationalising and streamlining the work of sector regulators in maximising the social and public value of spending. Such an office would of course be deeply interested in how public services are delivered and it would have specific mandate to assess the efficiency, effectiveness and equity of outsourcing, procurement and contract performance across the public sector.

 

[2] Institute for Government (2018) seminar on the government finance function

[3] Institute for Government (2018). Government Procurement: the scale and nature of contracting in the UK (forthcoming)

[6] Department for Communities and Local Government (2011).” Accountability: Adapting to Decentralisation “.

Enable Two-Factor Authentication

To access the admin area, you will need to setup two-factor authentication (TFA).

Setup now