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

Service Manager – Network Management

Somerset County Council
£46,122 per annum
A number of exciting permanent opportunities have arisen to drive forward further improvements to our traffic related services. Somerset
Recuriter: Somerset County Council

Principal Traffic Control Engineer

Somerset County Council
£33,799 to £37,849 per annum
A number of exciting permanent opportunities have arisen to drive forward further improvements to our traffic related services. Somerset
Recuriter: Somerset County Council

Assistant Engineer

Bedford Borough Council
£31,371 - £32,878 per annum
Bedford is growing at a fast pace and we are investing heavily in our highways infrastructure. Bedford, Bedfordshire
Recuriter: Bedford Borough Council

Senior Clerk of Works

Bedford Borough Council
£27,905 - £30,507 + market rate supplement £2,630 per annum
Bedford is growing at a fast pace and we are investing heavily in our highways infrastructure. Bedford, Bedfordshire
Recuriter: Bedford Borough Council

Senior Technician

Bedford Borough Council
£27,905 - £30,507 per annum
Bedford is growing at a fast pace and we are investing heavily in our highways infrastructure. Bedford, Bedfordshire
Recuriter: Bedford Borough Council

Engineering Technician

Bedford Borough Council
£24,313 - £26,999 per annum
Bedford is growing at a fast pace and we are investing heavily in our highways infrastructure. Bedford, Bedfordshire
Recuriter: Bedford Borough Council

Engineer – Multiple disciplines

Bedford Borough Council
£33,799 - £36,876 per annum
Bedford is growing at a fast pace and we are investing heavily in our highways infrastructure.  Bedford, Bedfordshire
Recuriter: Bedford Borough Council

Trainee Engineering Technician

Bedford Borough Council
£21,589 - £23,836 per annum
Bedford is growing at a fast pace and we are investing heavily in our highways infrastructure. Bedford, Bedfordshire
Recuriter: Bedford Borough Council

Senior Asset Engineer

Isle of Man Government
£47,064 - £54,805
The Isle of Man is a special place to live and work! Isle of Man (GB) (IM)
Recuriter: Isle of Man Government

Commercial Services Officer - Funerals

Brent Council
£33,291 - £35,724 p.a. inc. plus Standby Allowance
The post will be involved in all aspects of the funeral service Brent, London (Greater)
Recuriter: Brent Council

Transportation Planning Officer x2

Sandwell Metropolitan Borough Council
Band F, SCP 26-31 (£29,636 – £33,799 per annum) (£15.36 - £17.52 per hour)
The post holders will be part of a team developing transport policy encompassing all modes of travel Sandwell, West Midlands
Recuriter: Sandwell Metropolitan Borough Council

Highway Asset Engineer

Lambeth Council
£38,403 pa rising in annual increments to £41,466 pa incl LW
Lambeth is a vibrant place with a diverse population and an exciting cultural scene. Lambeth, London (Greater)
Recuriter: Lambeth Council

Senior Traffic Engineer

East Riding of Yorkshire Council
£32.029 - £34.788 career grade
We need an enthusiastic and experienced traffic engineer to manage our Traffic Team. East Riding of Yorkshire
Recuriter: East Riding of Yorkshire Council

Senior Community Infrastructure Levy Administration Officer

London Borough of Richmond upon Thames and London Borough of Wandsworth
£32,643 - £44,373
The successful candidate will play a key role in ensuring Richmond and Wandsworth Councils mitigate the... London (Greater)
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Engineer (Structures and Tunnel)

Medway Council
£31,385 - £37,053
Exciting opportunity has arisen to work within the highways department in Medway Council... Rochester, Kent
Recuriter: Medway Council

Principal Information and Monitoring Officer

London Borough of Richmond upon Thames and London Borough of Wandsworth
£40,183-£47,274 (Grade PO5)
Opportunity has arisen within the Spatial and Transport Planning service for a team leader with demonstrable practical experience of... London (Greater)
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Senior Community Infrastructure Levy Administration Officer

London Borough of Richmond upon Thames and London Borough of Wandsworth
£32,643-£44,373 (Linked Grade PO2- PO4)
There has never been a more challenging – or rewarding – time to work for Richmond and Wandsworth.  London (Greater)
Recuriter: London Borough of Richmond upon Thames and London Borough of Wandsworth

Senior Engineer – Highways Development Service (HDS)

North Yorkshire County Council
£38,813 - £42,683 pa
We are looking for someone to join the Development Management Team in a new post. Northallerton, North Yorkshire
Recuriter: North Yorkshire County Council

Senior Development Management Engineer – Section 38

Warwickshire County Council
£37,849 - £39,782
Due to the nature of the role the ability to travel effectively throughout Warwickshire is essential. Warwick, Warwickshire
Recuriter: Warwickshire County Council

Partnerships & Activities Manager

London Borough of Bexley
£31,353 - £36,876
Currently seeking an experienced manager to work in the Parks and Open Spaces Team of Bexley Council’s Communities Department. Bexley (City/Town), London (Greater)
Recuriter: London Borough of Bexley