Search in Features

David Lidlington’s five public interest objectives for outsourcing are welcome; will he go for a dozen?

Monday March 11th, 2019

It is very encouraging to hear the following words and commitment from David Lidington, Minister for the Cabinet Office:

John Tizard

John Tizard

“Every year, the Government spends £49 billion with external organisations and it is morally right that we make sure none of that money goes to any organisations who profit from the evil practices of modern slavery.

 “Similarly, it is right that we demand that the organisations we work with meet the high standards we need to protect our environment and employ workforces which represent our diverse society, including people with disabilities and those from ethnic minorities.

 “By making sure that these social values are reflected not just across the government, but through all the companies we work with, we will take a major step towards our goal of creating an economy that works for everyone.”

Many in social enterprise, charity and even the commercial sector have been waiting for such an announcement from Government for many years. David Lidington is to be congratulated for making this statement.

The Minister explicating says that he wants to consult on how government – and one hopes by implication the wider public sector – can address the following issues when contracting and outsourcing:

  • the use of firms of all sizes, including those owned by under-represented groups
  • the safety of supply chains – to reduce the risk of modern slavery and cyber security issues
  • encouraging firms to employ people from diverse backgrounds, including those with disabilities and from ethnic minorities
  • focusing on environmental sustainability to reduce the impacts of climate change
  • encouraging firms to prioritise staff training to boost their employees’ long-term employability

These five objectives are commendable and a good start. I would have liked to have seen the “require” rather than “encourage” to avoid any doubt or avoidance by either procuring public bodies or contractors.

I hope that the Government will consider widening the social and public interest requirements in all significant public service contracts beyond the proposed five objectives set out above and in the Ministerial statement. The Cabinet Office is now consulting on these proposals and, therefore, I hope that there will be many responses arguing for Mr Lidington to be a little bolder and go further.

It would be in the public interest to consider the following requirements for public service outsourcing contracts:

  • applying Freedom of Information to contractors, requiring them to give evidence to parliamentary and local authority oversight and scrutiny committees when requested
  • extending the powers of the NAO and other inspectorates to cover contractors, with powers to investigate the wider company beyond its contracting business
  • requiring transparent reporting of operational and financial performance for contracts and assessments against the original objectives and targets and audit procedures and their publication
  • requiring open book accounting to nationally set standards with external independent audits
  • requiring awarding bodies to consider contractors’ tax and remuneration practices and ratios into contracts deploying the Fair Tax Mark as far the current law allows
  • mandating all contractors to pay the Living Wage
  • strengthening TUPE, having Fair Wages Clauses in contracts, guaranteeing pension and union membership and recognition, ensuring that new recruits to contractors are employed on terms including pensions equivalent to those in the public sector

I could have set a longer schedule of potential requirements including ensuring that outsourcing assessments are holistic and take into account wider public interest considerations and costs; and making the strategic “make or buy” decision inclusive and transparent with published business cases.

However, I think that these additional seven contractual requirements build on the five set out by David Lidington are very clearly in the in same spirit. So, what about the “Lidington dozen public interest objectives”?

These plus a commitment to an independent evidence-based enquiry into the efficacy of public service outsourcing, including examining if and when it works and when it does not, and why, would be a fantastic legacy for any Cabinet Office minister.

Mr Lidington, are you are ready to go that bit further and make a much bigger impact?

Leave a Reply

debug