Assurance offered for companies bidding for government contracts

In a speech at the Reform think tank in central London, David Lidington reinforced the government’s commitment to the private and voluntary sector delivery of public services.

The Minister for the Cabinet Office launched a package of new measures designed to promote a healthy and diverse marketplace of companies bidding for government contracts, encouraging and making it easier for small businesses, mutuals, charities, co-operatives and social enterprises to take on government contracts.

Writing for the Daily Telegraph on 25 June on the need to prevent the collapse of Carillion happening again, Lidington said that it was important to keep bids for public sector work competitive while ensuring companies ‘play by the same rules’, rather than seeing the state absorb more of the work.

While Carillion’s collapse in January led to the loss of 2,300 job, with the outsourcing company owing in excess of £7 billion in liabilities, Lidington said that such companies deliver savings of 20pc on average compared to bringing services in-house. The rules will require companies to publish data on delivery times, response rates and customer feedback on important contracts so the public can see where money is being spent.

Lidington said: “We are determined to build a society where people from all parts of our country can access the best public services, and for those services to run efficiently and smoothly for them and their families. Whether that service is delivered by public, private or voluntary sectors, what matters is that it works for them and their everyday needs, while providing value for money for the taxpayer.

“The private sector has a vital role to play in delivering public services, something this government will never cease to champion. We want to see public services delivered with values at their heart, where the wider social benefits matter and are recognised. That means government doing more to create and nurture vibrant, healthy, innovative, competitive and diverse marketplaces of suppliers that include and encourage small businesses, mutuals, charities, co-operatives and social enterprises - and therefore harness the finest talent from across the public, private and voluntary sectors.

“That is why I can announce today that we will extend the requirements of the Social Value Act in central government to ensure all major procurements explicitly evaluate social value where appropriate, rather than just ‘consider’ it. By doing so, we will ensure that contracts are awarded on the basis of more than just value for money - but a company’s values too, so that their actions in society are rightly recognised and rewarded.”

Mark Fox, chief executive of the British Services Association, said in response: “The challenge to the industry is to improve management practices, increase transparency and develop new arguments for the private sector to deliver public services - a challenge we embrace.”