A hell of a lot of waste goes on in public services

How do we stop the carpet-baggers running off with the silver?

It is fashionable, these days, to refer to the state as a commissioner of services rather than a provider. From health to education, maritime rescue to employment services, the state - in the form of local as well as central government - is commissioning the services it once provided.

Inevitably, the people once responsible for managing a service are stepping back from the frontline and learning how to navigate the tendering and procurement processes that are part and parcel of spending taxpayers' money.

But, according to the OECD, “the volume of transaction and the close interaction between public and private sectors create multiple opportunities for private gain and waste at the expense of taxpayers”. Minimising the risk of fraud, corruption and mismanagement of public funds requires “transparency throughout the entire public procurement cycle”: taxpayers and service users are better protected when the public can help public servants hold private providers to account.

So how does the hands-off approach that seems to be commonplace in the UK help make sure public money is delivering public gain?

A survey by the OECD shows the UK is the only country out of 34 major economies that does not allow the public to see information about the selection and evaluation criteria. This means it is difficult to know if the recipient of public money is spending it as agreed. Nor does the UK reveal tender documents and only sometimes will it justify its decisions. And, if contracts are modified after being awarded, there is no policy to reveal this to the public.

At a local level this has the effect of taking power away from the local commissioners who, when they can see money has been spent on failed promises and missed targets, should be demanding delivery or remedy.

Just look, for example, at the myriad organisations that have sprung up to provide employment related services to local authorities. The range of services and the variety of programmes is befuddling and with no possibility of public scrutiny, local authorities are on their own when it comes to trying to hold their private-sector providers to account.

This is not a case of big companies muscling-in. Small, so-called “social enterprises” are involved too. With colourful stories and fresh-faced bravado they sell their services with, it would seem, no hope of delivery.

For the Newhams, Tower Hamlets and Southwarks, for example, this must be deeply frustrating: knowing they have paid out, have received nothing in return and face months of arguing and unaffordable legal bills if they try to recover their money. This is nothing compared to the impact on taxpayers, let alone the people that should have received the support and help that was offered, paid for and never delivered.

Perhaps public services need public scrutiny to help our remaining public servants stop the carpet-baggers from grabbing the silver. At the moment they seem pretty ineffectual but I would argue that it’s not all their fault.

Photograph: Getty Images

Spencer Neal is a reformed publisher who now advises on media and stakeholder relations at Keeble Brown. He writes about the ironies and hypocrisies that crop up in other peoples' businesses. He is also an optimist.

Photo: Getty
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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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