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New measures to help suppliers post-Carillion

carillion rail

Suppliers will be supported under new proposals aimed at rebuilding trust in outsourcing government contracts following the collapse of Carillon.

Measures include increased transparency for major contracts by publishing key performance indicators, improved training for government procurers, and measures to protect suppliers from cyber-attacks, Cabinet Office minister David Lidington announced.

The government will extend the Social Value Act to ensure that all major procurements evaluate the community benefits of a supplier and introduce a requirement to implement ‘‘living wills’’ to allow contingency plans to be rapidly put into place.

“We want to see public services delivered with values at their heart, where the wider social benefits matter and are recognised,” Lidington said in a speech at the Reform think tank in central London.

“That means government doing more to create and nurture vibrant, healthy, innovative, competitive and diverse marketplaces of suppliers that include and encourage small businesses, mutual [companies], charities, co-operatives and social enterprises – and therefore harness the finest talent from across the public, private and voluntary sectors.”

He added: “We are determined to build a society where people from all parts of our country can access the best public services, and for those services to run efficiently and smoothly for them and their families.

“Whether that service is delivered by public, private or voluntary sectors, what matters is that it works for them and their everyday needs, while providing value for money for the taxpayer.

“And whether it is operating our call centres, building our railways, or delivering our school meals – the private sector has a vital role to play in delivering public services, something this government will never cease to champion.”

The collapse of the construction giant in January prompted calls across the industry for an overhaul of the procurement system and fairer payment terms.

Lidington, who is also the chancellor of the Duchy of Lancaster, was questioned by a parliamentary inquiry into government procurement practice after major supplier Carillion entered compulsory liquidation in January.

National Audit Office comptroller and auditor general Amyas Morse told the public administration and constitutional affairs committee (PACAC) that the government must develop a more intelligent contracting strategy to attract a wider range of candidates with a more ‘‘imaginative’’ approach during an inquiry evidence session.

The government’s strategic supplier assessment scale was branded ‘‘slow and clunky’’, by the public accounts committee (PAC) after it was revealed that Carillion was only given a red rating after the July profit warning, and that government ignored recommendations to give Carillion a black ‘‘high risk’’ rating two months before it collapsed.

Lidington said: “Government cannot do this alone - we need the industry to come with us on this journey. We need them to put right failings where they have occurred; demonstrate their ability to respond to changing circumstances; and show their capacity for innovation and creativity as well.

“That is because we believe in an economy that works for everyone - what you might call a ‘responsible capitalism’ - where true fairness means everyone playing by the same rules as each other, and where businesses recognise the duties and obligations they have to wider society.

“By doing so, we will go some way to restoring trust between government, industry and the public - and build public services that have the confidence of the people they are there to serve.”

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