ICO calls for greater transparency in public sector procurement are gaining momentum; and for good reason. Transparency in the public sector would allow small and medium sized companies to access public sector contracts. This promotes growth of these often neglected businesses and encourages more ethical sourcing, not to mention opening up more options for supply.
The UK government are pushing their own agenda for transparency that is not driven by the EU. This agenda would allow greater access to information regarding public sector contracts, opening doors for those small and medium businesses to submit bids.
And earlier this year, a new voice lent itself to the cause. The Information Commissioner’s Office (ICO) are also calling for more transparency in outsourcing in addition to sourcing. Outsourcing is a big part of public sector procurement; the ICO estimate that around 50% of the £187 billion of government spending on goods/services goes on outsourcing.
The main issue arising in public sector outsourcing is that the Freedom of Information laws cannot keep up. The ICO carried out a survey, which found that 75% of people found it important for private companies working on behalf of the public sector should be The concern is that by outsourcing supplies and services freedom of information laws are struggling to follow the public pound. In a survey carried out by the ICO, 75% of people said it was important that private companies acting on behalf of public authorities should be subject to Freedom of Information laws.
The ICO’s report highlighted 4 steps that can be taken to improve public sector outsourcing transparency:
- Improved Contracts
A key issue is determining whether information held by a contractor is done so on behalf of a public authority. This would determine whether or not this information is subject to the Freedom of Information Act (FOIA).
The ICO deems standard government contracts as too procedure focused. It needs to be clearly defined in the contract when the information is considered to be held on behalf of a public authority.
- Voluntary Transparency
The public bodies are currently waiting for Freedom of Information requests to be submitted before then assessing which information is considered to be held on their behalf.
The ICO are trying to promote the voluntary offering of information. This would mean publishing the contract performance information (with the exception of commercially sensitive information). Publishing this information routinely without requests would reduce the number of FOI requests being submitted and help the public authorities exercise better control.
- Legislation
When a contractor is working on a project of significant value and/or is a long standing contract holder in the public sector, the ICO thinks that they should fall under FOIA.
E.g. A contractor who’s sole revenue is from public sector contracts, or a contractor working on a project of more than £5m in value or working continuously with public authorities for 5 years or more.
- Standardised Terms
Standardised contract terms, which require active publication of specific information are recommended by the ICO. This publishable information could include the contract itself, the contract performance information and key performance indicators, and details of what information falls under the FOIA and can therefore be requested.
While the report was simply a discussion piece, it could be an indication of things to come and it does offer some interesting points. But achieving the outlined ideas for change will not be easy.
However, the benefits of greater transparency in public sector procurement, and in outsourcing in particular, should drive the sector forward in making some relevant changes. Watch this space…