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Government will 'reconsider procurement approach' post-Carillion

carillion rail

The government will reconsider its approach to procurement in the wake of the Carillion collapse, one of Theresa May’s key lieutenants has said.

Cabinet Office minister David Lidington told the House of Commons’ Liaison Committee that the government may have to dedicate more “in-house resource” to procurement and contract management, as he admitted that lessons had to be learned about how public sector conracts were awarded and managed.

He said: “We in government have started to look at lessons in terms of how we go about contracting with companies, [and consider] whether we want to revisit the question of seeking best value for money by getting large contractors in to manage wide ranging, complex projects.

“That inevitably means you have a limited number of potential contractors.

“If a government department were to decide that they wanted to let smaller companies bid for a number of different contacts, that would mean more in-house resource and expertise in the procurement and management”.

Lidington, alongside civil service chief executive John Manzoni and government chief commercial officer Gareth Rhys Williams, was also quizzed over the prompt payment code during the committee hearing yesterday afternoon. Carillion was signed up to the code, but some suppliers reported having to wait up to 120 days to be paid.

It was possible for businesses to be paid in the recommended 30 days, but they had to accept a discount to their payment to do that, the committee heard. The government plans to review the code this year to “give it more teeth”, Lidington added.

 

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