CBI urges discussion of information release during contract talks

In every public services contract negotiation, contractors and their customers should discuss how to release information proactively and in response to public enquiries, the CBI has said.

The business lobbying organisation also said that any information released should be as accessible and comparable as possible.

Other recommendations made by the CBI on transparency are that:

• All government contracts should be published online, “as long as the customer is happy for this to happen”. When a contract is not published or is in any way redacted, there should be a clear explanation of why this has been done and at whose request;
• In every contract negotiation, there should be a presumption in favour of open book accounting. “In practice, this means a full and frank discussion between the contractor and its public sector customer about the contractor’s profit margin. Profit information should include the value or savings being delivered”;
• The National Audit Office should be able to audit government contracts with the private sector. “This should take place on a structured and systematic basis, to avoid adding a regulatory burden which will increase the cost of services.”

The CBI said the measures would boost trust in private and third sector managed public services contracts. It acknowledged that the industry “must work hard to boost public confidence”.

However, it added that the financial outlook meant that the Government must “continue to open up public services to independent competition to get the best taxpayer value possible”.

The Government spends £187bn a year with 200,000 private firms managing public services.

John Cridland, CBI Director-General, said: "The public services industry is a great British and international success story. Not only has it helped the UK public sector lower its costs while improving services, it’s also an important fast-growing part of our economic renaissance, contributing tens of billions of pounds to our economy.

"But public services businesses recognise that they operate in an industry which rightly demands close public scrutiny, which is why we are unveiling a range of measures to boost transparency and accountability.”

Cridland added: "We can’t ignore the fact that confidence in the sector has been badly hit by several high-profile failures and that it will take time and meaningful change to rebuild it.

"That said, we must not let anti-business rhetoric tar the public services industry as a whole, because the UK needs the expertise, investment, growth and job creation which these innovative firms bring to our economy."

Ruby McGregor-Smith, CEO of Mitie and Chair of the CBI’s Public Services Board, said: "The public services industry is proud of its contribution to the UK economy, helping to tackle the deficit, creating thousands of jobs and apprenticeships and exporting our services around the world.

"But all businesses delivering public services need to do more to build a trusting relationship with the public. To make that happen, Mitie, along with other CBI public services businesses, are committing to releasing more information proactively, publishing all government contracts online, being open and honest about our profits and being independently audited."