Wednesday 5th March, 2014

The CBI has proposed new measures to boost transparency and trust in private and third sector managed public services contracts, so that they can continue to work with the Government to deliver high-quality services and boost the UK economy.

The Government already spends £187 billion a year with 200,000 private firms managing public services which in turn contribute £48.7 billion to the economy. But the industry recognises that it must work hard to boost public confidence in order to be able to do its job in this sector.

John Cridland, CBI Director-General, said: "The public services industry is a great British and international success story. Not only has it helped the UK public sector lower its costs while improving services, it’s also an important fast-growing part of our economic renaissance, contributing tens of billions of pounds to our economy.

"But public services businesses recognise that they operate in an industry which rightly demands close public scrutiny, which is why we are unveiling a range of measures to boost transparency and accountability. We can’t ignore the fact that confidence in the sector has been badly hit by several high-profile failures and that it will take time and meaningful change to rebuild it.”

The CBI’s recommendations on transparency include:

1. In every contract negotiation, contractors and their customers should discuss how to release information proactively and in response to public enquiries, but also make the information released as accessible and comparable as possible.
2. All government contracts should be published online, as long as the customer is happy for this to happen. When a contract isn’t published or is in any way redacted, there should be a clear explanation of why this has been done.
3. In every contract negotiation, there should be a presumption in favour of open book accounting. In practice, this means a full and frank discussion between the contractor and its public sector customer about the contractor’s profit margin. Profit information should include the value or savings being delivered.
4. The National Audit Office should be able to audit government contracts with the private sector. This should take place on a structured and systematic basis, to avoid adding a regulatory burden which will increase the cost of services.