Select committee inquiry
Transforming government’s contract management
Closed
What the inquiry looked at
“Following the discovery of serious anomalies in the billing practices under the Ministry of Justice’s electronic monitoring contracts with G4S and Serco, government commissioned a series of reviews of contract management across departments. These found widespread, consistent and long-standing problems. As a result, the Cabinet Office requested all departments prepare contract management improvement plans. The Committee is holding two hearings on this matter, the first examining contract management improvement plans in the Home Office and the Ministry of Justice and the second looking more widely at government’s response and the changes being led by the Cabinet Office and the new Crown Commercial Service Home Office and Ministry of Justice This inquiry will assess approaches to contract management in the Ministry of Justice and Home Office including: the responses to the recent internal reviews of contract management problems; governance and accountability arrangements; contract management capability and management information; and whether good practice is being actively identified and shared. It will scrutinise what went wrong with contract management in the two departments and their efforts to improve it; and examine what more the centre of government must do to help departments improve their contract management performance. Cabinet Office This inquiry will focus on contract management across the whole of government. It will identify lessons from the overbilling and corporate renewal episodes; examine commitments to tackle long-standing problems with contract management across government; and examine the role of the new Crown Commercial Service in supporting this agenda. Relevant information National Audit Office report: Transforming contract management: public order, justice and rights (PDF 442 KB) National Audit Office report: Transforming government's contract management - Central Finance and Treasury (PDF 933 KB) Chair's statement: transforming contract management”
The committee's words, from the inquiry page on parliament.uk ↗.
What the government said
The government responded on 25 February 2015.
Read the government's response ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 22 July 2014 to 6 February 2017.
- Oral evidence 2 sessions
- Report 10 Dec 2014
- Government response 25 Feb 2015
- Correspondence 6 Feb 2017
What it recommended 1 recommendation · 15 conclusions
1Conclusion: The government will not achieve value for money from its contracts until it pays...
Concluded (the committee's words)
Conclusion: The government will not achieve value for money from its contracts until it pays much more attention to contract management
2Recommendation: The Cabinet Office must lead efforts to make sure that the current emphasis on...
Concluded (the committee's words)
Recommendation: The Cabinet Office must lead efforts to make sure that the current emphasis on improving contract management is embedded across all departments and that tendering processes did not discriminate against small and medium sized enterprises. It must not lose focus and should report back to this Committee by the end of 2015 on the progress made in implementing reforms across government
3Recommendation: Accounting Officers remain accountable for spending throughout the life of contracts.
Concluded (the committee's words)
Recommendation: Accounting Officers remain accountable for spending throughout the life of contracts. They should put in place an accountability framework for contracts which specifies how senior oversight of major contracts should work in practice - including the information needed to scrutinise and challenge contractor performance, cost and progress in making further savings—and the personal responsibilities of senior managers, with appropriate sanctions and rewards for performance.
4Recommendation: We welcome progress to improve the government’s commercial and contract management skills, but this...
Concluded (the committee's words)
Recommendation: We welcome progress to improve the government’s commercial and contract management skills, but this needs to be supported by concerted Cabinet Office action in two areas: to increase the attractiveness of careers in commercial disciplines including pay, status and career development; and do more to raise the commercial awareness of operational managers so they can work with the commercial professionals to achieve value for money throughout the life of contracts.
5Recommendation: Alongside the Cabinet Office reporting back to us at the end of 2015, both...
Concluded (the committee's words)
Recommendation: Alongside the Cabinet Office reporting back to us at the end of 2015, both the Ministry of Justice and the Home Office should report back to us specifically on progress with their contract management improvement plans: • For the Ministry we will be particularly interested in arrangements for running the ‘Transforming Rehabilitation’ contracts (for outsourcing probation services) which we see as a litmus test for better management of high risk and complex contracts. • For the Home Office we will be particularly interested in what it has done to extend improvement plans beyond its commercial directorate and into the operational management of contracts. Contractor’s duty of care to the taxpayer
6Conclusion: Contractors have not shown an appropriate duty of care to the taxpayer and users...
Concluded (the committee's words)
Conclusion: Contractors have not shown an appropriate duty of care to the taxpayer and users of public services. 22
7Recommendation: The Cabinet Office should work with industry to define what obligations a duty of...
Concluded (the committee's words)
Recommendation: The Cabinet Office should work with industry to define what obligations a duty of care should entail, what sanctions would apply should performance fall short, and require senior executives to attest annually to the strength of their internal controls over public contracts and to be personally accountable to parliament for performance.
8Recommendation: The ‘corporate renewal’ process is a new concept for many.
Recommended (the committee's words)
Recommendation: The ‘corporate renewal’ process is a new concept for many. The Cabinet Office and HM Treasury should publish a review of this process and its outcome, and, when disseminating findings, make clear to all departments what it expects them to do differently and what different behaviours departments should expect from the contractors. Management of public service markets
9Conclusion: Public service markets are becoming more difficult for government to manage.
Concluded (the committee's words)
Conclusion: Public service markets are becoming more difficult for government to manage.
10Recommendation: Led by the Cabinet Office, departments must take concerted action to develop competitive markets...
Concluded (the committee's words)
Recommendation: Led by the Cabinet Office, departments must take concerted action to develop competitive markets for public services. Government must use its contractual powers to intervene in market consolidation - so that taxpayers and public service users benefit from the innovation and competition a thriving market can offer.
11Recommendation: All government contracts should include robust sanctions for underperformance or weak control which should...
Concluded (the committee's words)
Recommendation: All government contracts should include robust sanctions for underperformance or weak control which should be applied rigorously when performance falls short, and performance on previous contracts must always be taken into account when awarding new work.
12Recommendation: The Cabinet Office should look at the barriers to SMEs joining markets and develop...
Concluded (the committee's words)
Recommendation: The Cabinet Office should look at the barriers to SMEs joining markets and develop a plan to address each barrier. Departments should be required to demonstrate that they have considered disaggregated models for each major contract Rebalancing power in favour of the taxpayer
13Conclusion: Government’s current approach to contracting gives too much advantage to contractors.
Concluded (the committee's words)
Conclusion: Government’s current approach to contracting gives too much advantage to contractors.
14Recommendation: The Cabinet Office standard operating procedures should require departments to set and regularly review...
Concluded (the committee's words)
Recommendation: The Cabinet Office standard operating procedures should require departments to set and regularly review KPI regimes, to ensure they are incentivising the right behaviours, with clearly specified indicators that are capable of highlighting poor performance at an early stage.
15Recommendation: The Cabinet Office should mandate the inclusion of open book provisions in all government...
Concluded (the committee's words)
Recommendation: The Cabinet Office should mandate the inclusion of open book provisions in all government service contracts and set clear expectations for how these provisions should be utilised to manage the contract throughout its life. 23
16Recommendation: The Cabinet Office should require all service contracts to be published, including a clear...
Concluded (the committee's words)
Recommendation: The Cabinet Office should require all service contracts to be published, including a clear expression of the performance the service user can expect and then how contractors are performing. 24
Evidence
Oral evidence sessions 2
- 10 Sep 2014No witnesses recordedparliament.uk ↗
- 8 Sep 2014No witnesses recordedparliament.uk ↗