MPs slam Govt on outsourcing and call for PFI halt

 

MPs have criticised the Government’s approach to outsourcing, accusing it of having a ‘preoccupation with cost’ while being unable to show it provides better services for less money.

In a new report following the collapse fo Carillion, the Public Administration and Constitutional Affairs Committee called for a moratorium on new PFI schemes, and a review of the financing arrangements for two flagship roadbuilding schemes.

”Local

MPs said the Government's overriding priority for outsourcing is ‘spending as little money as possible while forcing contractors to take unacceptable levels of financial risk’.

Committee chair Sir Bernard Jenkin MP, said: ‘It is staggering that the Government has attempted to push risks that it does not understand onto contractors, and has so misunderstood its costs. It has accepted bids below what it costs to provide the service, so that the contract has had to be renegotiated.

‘The Carillion crisis itself was well-managed, but it could happen again unless lessons are learned about risk and contract management and the strengths and weaknesses of the sector.’

The committee said the Government’s approach was made more damaging by the fact that the information it uses to inform the outsourcing process can be ‘either incomplete or simply incorrect’, something it ‘must be aware’ of as it has written contracts that force contractors to pay out when it gets its own data wrong. 

The Government has also been known to forego performance penalties in the initial phases of contracts.

MPs said that ultimately, this has led to worse public services as companies have been sent a clear signal that cost, rather than quality of services, is the Government's consistent priority.

They said contractors had told them that the Government was known to prioritise cost over all other factors in procurements, ‘driving prices down to below the cost of the services they were asking firms to provide’.

‘Worse, the Government was unable to provide significant evidence for the basic assertion behind outsourcing: that it provides better services for less public money, or a rationale for why or how it decides to outsource a service. This was especially true for PFI. Shockingly, the Government admitted to the Committee that the "entire [PFI] structure is to keep the debt of the balance sheet”.’

The committee called on the Government to commit to underpinning contracts with realistic assessments of cost and risk transfer.

MPs also said that the Government ‘should not approve any further PFI projects until they can clearly justify, based on evidence, their claims about the benefits of the scheme’, adding: ‘Ministers should be able to choose to use state finance where it is clear that private finance would bring no benefits.'

The committee said: ‘The Treasury should scrutinise in particular the recently approved transport projects (the A303 Stonehenge tunnel and roads and the £1.5bn approach roads to the Lower Thames Crossing) to ensure that there is good evidence that private finance represents the best value for money in these cases.’

Transport Network has approached Highways England for comment.

Register now for full access


Register just once to get unrestricted, real-time coverage of the issues and challenges facing UK transport and highways engineers.

Full website content includes the latest news, exclusive commentary from leading industry figures and detailed topical analysis of the highways, transportation, environment and place-shaping sectors. Use the link below to register your details for full, free access.

Already a registered? Login

 
comments powered by Disqus
 
 
highways jobs

Highways Maintenance Manager

Plymouth City Council
£37,107 to £41,846
We are looking for a dynamic Highways Manager to lead and co-ordinate all our maintenance activities Plymouth, Devon
Recuriter: Plymouth City Council

Head of Customs

St Helena
£55k pa, taxable in St Helena; a tax free International Supplement will also apply
Could you lead the HMCE team to efficiently implement the Customs & Excise Ordinance in border protection Saint Helena (SH)
Recuriter: St Helena

Neighbourhood Services Operations Manager

East Lindsey District Council
£30,756 - £35,229 per annum (Grade 7)
This is an exciting opportunity to oversee the delivery of the cleansing and grounds maintenance function in one of the largest Districts of the UK Manby, Louth
Recuriter: East Lindsey District Council

Assistant Highways Officer (North & South Kesteven)

Lincolnshire County Council
£19,819 - £22,401
Lincolnshire County Council is looking to recruit an Assistant Highways Officer to support the Local Highways Management Team Lincolnshire
Recuriter: Lincolnshire County Council

Chief Executive

Sutton London Borough Council
Competitive Salary
We believe that such important agendas require exemplary leadership. Sutton, London (Greater)
Recuriter: Sutton London Borough Council

Project Engineers

North Yorkshire County Council
£24,313 to £34,788, dependent upon experience.
We are looking for Project Engineers to join our Highways and Transportation service based across North Yorkshire. North Yorkshire
Recuriter: North Yorkshire County Council

Improvement/Maintenance Managers

North Yorkshire County Council
£46,503, subject to pay award agreement
Are you an experienced professional looking for a management opportunity? North Yorkshire
Recuriter: North Yorkshire County Council

Engineering opportunities

North Yorkshire County Council
Ranging from £24,313 up to £34,788
Are you a qualified engineer starting out on your career? North Yorkshire
Recuriter: North Yorkshire County Council

Heritage Environment Officer

East Lindsey District Council
£30,756 - £35,229 per annum (Grade 7)
This is an exciting opportunity for an enthusiastic and motivated Heritage Environment Officer to join the Council Manby, Louth
Recuriter: East Lindsey District Council

Senior Project Engineer (Highways Laboratory Services Manager)

Derbyshire County Council
Grade 13 £39,867 - £43,282 per annum
Derbyshire County Council are looking for an enthusiastic, enterprising and experienced laboratory Manager Derbyshire
Recuriter: Derbyshire County Council

Head of Policy

National Parks England
£36,153 - £39,961 pa, pro rata (£28.9k for 28 hours per week)
Help us ensure that England’s National Parks remain a national treasure. London (Central), London (Greater)
Recuriter: National Parks England

Urban Traffic Control Engineer

Transport for Greater Manchester
£26,240.00 - £37,369.00 Per Annum
Have you ever thought about who runs the traffic signals in Greater Manchester? Greater Manchester
Recuriter: Transport for Greater Manchester

Environmental Health Officer/Graduate Environmental Health Officer

Camden London Borough Council
£32,473 - £41,657
Make it work for you. Make it your Camden.  Camden, London (Greater)
Recuriter: Camden London Borough Council

Process Officer

Camden London Borough Council
£28,910 - £33,531
Make it work for you. Make it your Camden.  Camden, London (Greater)
Recuriter: Camden London Borough Council

Parking Asset Officer

Camden London Borough Council
£28,910 - £33,531
We are seeking an Asset Officer who will be responsible for ensuring all on-street parking Camden, London (Greater)
Recuriter: Camden London Borough Council

Waste Services Loader

East Lindsey District Council
£16,880 - 17,681 per annum (Grade 2)
An exciting opportunity has become available to join the Council's Waste Services department in the role of a Waste Loader Louth, Lincolnshire
Recuriter: East Lindsey District Council

Food Safety Environmental Health Officer

Camden London Borough Council
£35,913 - £41,657
As an Environmental Health Officer within Environmental Health, Business and Consumer Services your focus will be food safety issues. Camden, London (Greater)
Recuriter: Camden London Borough Council

Deputy Head of Service – Street Services

Royal Borough of Greenwich
£52,494 - £55,569
An exciting opportunity has arisen for a Deputy Head of Service Greenwich, London (Greater)
Recuriter: Royal Borough of Greenwich

ECONOMIC PROJECTS OFFICER

Melton Borough Council
Salary £23,866 to £33,136 per annum
We are looking for an ambitious and proactive person enthusiastic about regeneration, town centre and development projects Melton Mowbray, Leicestershire,
Recuriter: Melton Borough Council

Environmental Crime Officer

East Lindsey District Council
£19,446 - £22,401 per annum (Grade 4)
We are looking for 2 people to join our Enforcement Team to perform a new innovative role at an exciting time within the department. Manby, Louth
Recuriter: East Lindsey District Council