The National Audit Office (NAO) has called for the government to seek greater access to, and make better use of, information regarding public-private outsourcing contracts, particularly where costs and profits are concerned.

The NAO report “Open-book accounting and supply-chain assurance," published on 1 July 2015, has revealed that information on how much outsourced public services cost service providers and what profits they are making is currently only available in just 31 per cent of contracts outsourced by the government.

Based on case studies featured in the report, the NAO has identified five approaches that should be adopted by contract managers in the civil service:

• Ensuring price complies with the contract

• Making better informed commercial decisions

• Assuring processes

• Maintaining control of risk

• Achieving step-changing innovation

The NAO went on to recommend that every government department should have a solid policy on when it will apply open-book accounting – only 23 per cent of government organisations do so now.

In addition to this, the NAO has advised contract managers on the government-side to be more “hands-on” with their outsource service providers.

“Contract management is not a desk job,” said Amyas Morse, NAO head. “We are reminded of this in all the best practice and the worst failures we see. For government to be accountable for contracted out public services; for it to understand its suppliers; for it to exercise oversight; and for it to promote value for money, it requires its contract managers to take a ‘hands-on’ approach and to go and see for themselves what their suppliers are doing.”

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