Recommendation 25

We asked the Treasury how it supports government departments to prepare for and manage potential supplier failure, and what contingency plans it had in place to address supplier failures, particularly for critical services, to avoid over-reliance on Government support. The Treasury 51 C&AG’s Report, para 3.7 52 Q 62; C&AG’s Report, para 3.9 53 Qq 37-38 and 41, 45 54 Qq 37 and 52 55 Q 3 56 Qq 23, 79 and 81; C&AG’s Report, Investigation into the rescue of Carillion’s PFI hospital contracts, Session 2019–20, HC 23, January 2020, pp 5-6 16 highlighted that being ready for failure was one of the lessons learned from Carillion that the NAO and government had pointed to. The Treasury added that there are “living wills” in place within contracts which list all the services that are reliant on the supplier and how those services will continue in the event of insolvency. The Treasury also told us that all departments need contingency planning and to support this, it had published four playbooks by sector, 12 guidance notes, and a sourcing playbook which includes some of the resolution plans. Where necessary, the Government Commercial Function also assists departments with drawing up management plans.57 Contract management