“The government has wasted at least £14 billion between 2016 and 2019 on poorly managed outsourcing contracts finds a report from the Reform Think Tank.
The report is based on an analysis of investigations by the National Audit Office NAO), Parliamentary Select Committees and other statutory bodies. The total value of the contracts investigated was £71.1 billion.
The Ministry of Defence accounts for 27 per cent of this waste. This includes a 17 year delay in the full decommissioning of nuclear submarines and a poorly planned army recruitment programme. This saw soldiers forced into backoffice jobs to clear an IT backlog created by an untested IT system created in partnership between the army and Capita.
Other examples include the vastly expensive liquidation of Carrillion, which cost the government at least £148 million as well as involving the time and resources of 14 government departments and public bodies.
Also the Department for Education continued to give Learndirect £105 million after the programme was rated ‘inadequate’ by Ofsted. This should have led to the funding being withdrawn.
A third of the government’s annual budget is spent on outsourced services, at a total of ££292 Billion.
Reform is now calling for an independent regulator of the outsourcing sector which – unlike the NAO or Select Committees would have the power to enforce change and impose sanctions on failing providers.
Senior Researcher and Reform procurement lead, Dr Joshua Pritchard said “Our public services cannot function without outsourcing. But when it goes wrong, it’s taxpayers who end up footing the bill
“The £14.3 billion wasted as a result of poorly drawn up and managed government contracts is inexcusable.
“We need a new regulator with the power to prevent public money being squandered because of totally avoidable mistakes.”