Why we should make government suppliers subject to Freedom of Information

We've featured a couple of posts in the last few days week with a similar theme. Firstly, Sir Humphrey telling the Permanent Secretary how he can engage his favourite consultant without anything as tricky as a procurement process.  Then on Tuesday, a slightly darker tale of corruption disguised by use of a prime contractor, again avoiding competition and public scrutiny.

Our point was to illustrate a loophole that might seem like a trivial matter, but is a major danger to the integrity of our public services. Prime contractors to the public sector have total freedom in terms of how they place work with sub-contractors; not only do they not have to follow any set procurement process, their activities have limited visibility to the outside world. And “Primes”, as we’ve reported before, are doing more and more work that once would have been the preserve of the public sector itself. This is driving opportunity for corruption and fraud – and making it harder for the public to assess competence and value for money as well in some cases.

Even before the Freedom of Information regulations came into force, you could usually, if you tried hard enough, find out whether proper procurement processes had been followed in public sector bodies. As the last resort, a legal challenge would get to the bottom of (for instance) how bidders for a certain contract had been evaluated and why a certain firm had been chosen.

But if we’re trying to examine why and how a Prime Contractor, (appointed properly themselves, let’s assume), chose their sub-contractors, we’re potentially in the dark. They may have done so through totally professional and effective means. Or corruption might have seeped into their organisation and influenced the decision; or as in our theoretical examples, the public sector organisation might have exerted pressure on the Prime for motives that weren’t totally pure.

That might be the fairly harmless Sir Humphrey example – oiling the wheels to make things happen, getting things done that probably are the “right” things to do.  Or it could be the corrupt public servant getting kickbacks or pushing the business via the Prime to favoured suppliers for personal gain.

There are other examples where the lack of transparency of what goes on in the supply chain is worrying as contractors carry out more and more sensitive work (in the Police and security sector, the Work Programme, with the Armed Forces). Are those contractors bound by the same codes of conduct on whistleblowing for instance? Do they have the same constraints on their actions or accountability to the public?

Now you might argue that all of this can be handed by good contracting and contract management. And to some extent that is true. The public authority can request for instance that the Prime responds positively to FOI. But I think we need to go further. We need a binding code of conduct for contractors that covers these issues and probably some new legislation, including making contractors to the public sector subject to FOI when that question relates to their work for the public sector.

Contractors would resist this like mad – and there is a cost involved of course. But actually I’m in favour of tightening up somewhat the rules of FOI to stop frivolous requests, which would mitigate the cost element. And ultimately, this would be a very small burden for the good suppliers who have nothing to hide and already have decent processes which drive good value and guard against corruption.

I’m not conceptually opposed to outsourcing of public sector work, but if we want it to be done effectively and honestly, we need some more governance around some of these issues.  Otherwise I’m concerned that the next wave of scandals will be around these issues. That might come from within the Primes and their supply chains – or it  may come from public sector buyers / commissioners working together with suppliers against the best interests of the public and taxpayers. Because one thing we do know, is that if there are easy ways for fraud and corruption to blossom, it will.

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Voices (2)

  1. John Diffenthal:

    I agree with the basic idea that Primes should be subject to FOI rules. Some Primes already cooperate with their Councils to provide data but that clearly varies enormously by area and Prime. David Orr’s description of his experiences with South West One made clear how easily Primes can avoid answering questions if they so choose.

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