17 May 2012
A National Audit Office report into contracting by the Department of Work and Pensions has found that all is not well! Fraud by contracting firms runs to hundreds of thousands of pounds. The report explores abuse of public money by the major contractor- A4e (perjoratively referred to by journalists as “all for Emma”, the former chair of the contractor). The conclusion is that the contracting model used by government agencies is not fit for purpose.
Government contracting is a complex craft that agencies – and their Ministers – have not mastered. The experience seems to be that contractors outwit agencies and seldom deliver in the public interest. “… anything to do with people and human services, which are going to offer the most lucrative contracts, is anything but simple. What constitutes a job? A4e showed how definitions are elastic. Measuring whether claimants are being treated well, or effectively, requires continuous contract monitoring and rigorous inspection. And that, by adding to the cost of the contract, changes the economics of outsourcing…”
The National Audit Office found that the “black box” model of procurement “does not specify how a provider should achieve outcomes … the how is as important as the how many…” NAO criticises the inadequacy of performance measurement – there is a need to standardise contractors’ standards, to inspect their behaviour, to collect data from people complaining to and about the contractor – and to audit contractors’ auditors. But that begins to look rather like the traditional bureaucratic way of doing things – of checks and balances. And that increases costs, negates the possibility of staff reductions, and diminishes commercial viability.
Suggestions at the Public Accounts Committee have included extending coverage of the Freedom of Information Act to government contractors. And the facetious may also feel that contractors should be subject to whistleblowing legislation and to the oversight of the Ombudsman. Perhaps providers competing for All of Government contracts should be required to imbue their staff with the spirit of service!