Statement on managing government suppliers

12 November 2013

A statement from The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts:

“Between them, private companies receive billions of pounds of taxpayers’ money a year to provide public services on which we all, including some of the most vulnerable people in our society, depend.

The memorandum on the four major contractors – G4S, Capita, Atos and Serco - reveals for the first time the size of this industry and how much money these companies are making from contracts funded by the British taxpayer. The vast majority of the £187 billion the public sector spends on goods and services every year goes to private providers.

I asked the NAO to carry out this work after looking at case after case of contract failure- G4S and the Olympic security, Capita and court translation services, Atos and work capability assessments, Serco and out-of-hours GP services, to name a few. In each case we found poor service; poor value for money; and government departments completely out of their depth.

These reports together raise some big concerns:  the quasi-monopolies that have sprung up in some parts of the public sector; the lack of transparency over profits, performance and tax paid; the inhibiting of whistleblowers; the length of contracts that taxpayers are being tied into, and the number of contracts that are not subject to proper competition.

The recent fraud allegations surrounding the Ministry of Justice’s electronic tagging contracts with G4S and Serco are also a reminder of how important it is that government properly scrutinises and monitors its contracts with private providers.

It is the Government’s policy to outsource delivery of public services, but what it cannot do is outsource responsibility. Departments have a duty to ensure that the taxpayer is not being ripped off and that people, not profit, remain at the heart of our public services.”

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