July 17, 2013 / 11:13 PM / 5 years ago

Britain to step up scrutiny of public contracts

LONDON (Reuters) - Britain said it would accelerate its reforms of the 93 billion pound public services outsourcing market to save the taxpayer money as external reviews into company practises get underway.

Britain said earlier this month it had placed all contracts held by G4S and Serco, two of its largest suppliers, under review after an audit found they had charged for tagging criminals who were either dead, in prison or never tagged in the first place.

“Our reforms already address the need for the Civil Service to improve its commercial capability and how it manages contracts. But we must accelerate the pace of change to make more savings for the taxpayer, create better quality, more efficient public services and promote growth,” Britain’s Cabinet Office, charged with overseeing government procurement, said.

The comments came after an influential think tank published a report on Thursday that called for the government to slow down plans to outsource more public services, an immediate review of competition in the sector, and for a greater role for competition authorities in clearing new deals.

Two external reviews are also underway, one probing the scale of government contracting and its relationship with its top suppliers, conducted by the National Audit Office, and another looking into competition for government IT contracts.

The Institute for Government think tank said the government should mandate competition authorities to look at issues across all sectors at a regional level, to check whether smaller firms are able to compete.

The report also recommends that markets involving new outsourcing deals worth over 100 million pounds a year should first be assessed by a competition watchdog like the Office of Fair Trading.

In a statement, the OFT said that it believes difficult and costly regulatory intervention can be avoided with sufficient planning and expertise from the start.

Two OFT directors, and one of its non-executive directors, were on the advisory board overseeing the 126-page report.

Wider scrutiny of the public sector outsourcing market is forcing ministers to try and spread some business away from the biggest firms.

Prime Minister David Cameron wants small and medium-sized companies (SMEs) - those with fewer than 250 employees and a turnover of less than 50 million euros - handling 25 percent of all government contracts by 2015.

Reporting By Christine Murray; Editing by Elaine Hardcastle

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