There has been a lot of noise about HMG handing out contracts to private companies during the Coronavirus crisis without proper tendering.
Lots of these contract awards are actually pretty sensible; emergency contracts for ventilators and testing services.
There are however some eye watering contracts being awarded, including over £100m for the supply of PPE to Pestfix, a pest control company with assets of just £74k
I’ve run a public sector procurement department and emergency or not the NAO need to look into these contracts urgently.
This is presented by many as proof that the Government has a secret sinister plan to outsource Government functions to their mates, driven by a neo-liberal ideology.
I’m not sure I agree
While short term one off contracts for Covid support have been thrown around the Government has quietly scrapped the outsourcing of probation services. This was a key policy of the Cameron Government, and was championed by Chris “Failing” Grayling. When I signed my agreement with HMG I was given a list of Ministers that I was barred from saying rude things about. Grayling wasn’t on the list so I can be as rude as I like about him. He’s hopeless.
In total £1.3bn of contracts are being brought back in house. This has been trailed for some time, but the announcement was snuck out last week. David Gauke wanted to scrap outsourcing when he was Justice Minister, but he ended up resigning not just from the Government, but leaving the Conservative party to fight Brexit.
I’m not opposed to outsourcing Government administrative functions to the private sector as long as the contractor accepts risk with their reward, and there are contractual mechanisms that incentivise good performance.
I do however oppose all outsourcing of criminal justice services. These are functions that only the state should be carrying out. Partly this is because the potential for outsourcing to create perverse incentives that distort the execution of justice, but also because it is a key competence of the state, not the market.
I also expect that when the Covid crisis is over the NHS internal market will be gone too. A radical step in ending the marketisation of healthcare
I don’t think Johnson is a neo-liberal, in fact I don’t think he is any kind of liberal at all. His Government is an oligarchy, a bunch of rich chums, who do what they like.
Libertarianism for the rich. Authoritarianism for the rest of us