Think tank calls for accountability code of conduct to boost oversight of private sector
A think tank has called for increased public oversight of the private sector through a new accountability code of conduct as well as a social responsibility accreditation system for all contracts over £200,000 and open book accounting on large contracts over £1m.
The New Local Government Network (NLGN) also recommended that social value should be replaced with a stronger measure of social impact in order to boost the ability of the public sector to drive long term value through partnerships.
“For example, public sector commissioning bodies should be able to enforce payment of the living wage through all contracts, or the public sector will pick up the costs of low pay elsewhere in the system,” the NLGN report, ‘From Transactions to Changemaking: Rethinking partnerships between the public and private sectors’, suggested.
It also called for a new government-backed review into improving transparency over private sector contracts for public services, "to ensure data on cost, quality and performance is openly available".
The recommendations came after NLGN conducted research that suggested a declining appetite for outsourcing in local government.
Its survey of council leaderships found only 15% said they intended to outsource more over the next two years. Some 39% said they would outsource less over the next two years, while 46% indicated no change from current levels.
“This dwindling confidence in outsourcing suggests that councils are seeking greater control over service delivery arrangements, driven by funding and demand pressures,” NLGN said.
“Evidence also shows that councils are increasingly exploring new, innovative forms of partnerships such as trading companies and joint ventures. Meanwhile government departmental spend on outsourcing is still growing, although the backlash after high profile failures such as Carillion’s collapse has dented public confidence in partnership arrangements.”
The report urged the government to recognise that partnerships with the private sector were not a solution to funding reductions as a ‘cheap option’. NLGN added: “In fact, cuts to the public sector have undermined the capacity and expertise available to drive value through partnerships.”
Adam Lent, Director of the New Local Government Network, said: “Our findings show that the public sector is already rethinking its relationship to the private sector. But the current national political debate is missing the point. The Conservative Government takes a business as usual approach to outsourcing, while the Labour Party advocates taking everything back in house.
“Our research finds that it is not a question of more or fewer partnerships, but establishing better ones. With new measures to boost oversight, make contract performance more transparent and to enhance the social return on public investment, partnerships will be fit for purpose for today’s challenges.”
Simon Goacher, partner and head of local government at national law firm Weightmans, said: “If enacted, the report’s recommendations should help local government generate greater value from private sector partnerships and make the measurement of their social impact simpler. However, we should remember the onus isn’t just on Whitehall to deliver this change.
“The blueprint outlined by The NLGN here should encourage local government to build on existing good practice in the commissioning of public service already observed by many councils. Avoiding transactional, cost driven procurement is a great first step. But this should be accompanied by a change of thinking that pins down exactly what’s needed to make a contract a success from the outset.
“This means taking the time to canvas the opinions of key stakeholders within the community and incorporating their measures of success into a bespoke, transparent procurement process.”
NLGN’s research was conducted in partnership with ENGIE, Jacobs and Weightmans.
