“Half of the £187bn government spends with third parties each year goes on contracted out services but insufficient information is published on what this is spent on and the value obtained.”
CIPFA briefing March 2015
CIPFA has called for action from the government to introduce standard requirements for outsourced contracts in a recent briefing. CIPFA chief executive Rob Whiteman said ‘the amount of taxpayers money being spent through third parties to deliver public services is increasing. Meanwhile there are a growing number of scandals and disappointing contract failures which demonstrate just how significant the risk is to the public sector when these arrangements go wrong. It is therefore far too important for the government to let slide, and needs leadership and direction from those who decide where public resources are spent.'
The solution, according to CIPFA, is Open Book Contract Management (OBCM), which is “an approach for procuring and delivering services in the public sector in a way that can deliver considerable cost savings and help drive real savings from the contracting process. It is based on the fundamental principle of pain/gain share – both the client and the contractor ‘own’ the costs. If the costs are well managed, both client and contractor have the opportunity to share any savings. Both share the risk if costs escalate. OBCM therefore focuses on value for money – not just lowest cost.”
At Moore Stephens, we have developed cost effective approaches to Open Book Review and Contract Management, which can be implemented as a combined service or discrete services. By having and invoking an open book clause and implementing Open Book Contract Management arrangements, you will be able to take control by probing deeper into the operations of your contractors, paving the way to discuss, in a more informed manner, further opportunities to improve the efficiency and effectiveness of service delivery. As contracts become larger in scale, longer term in duration and increasingly flexible and complex, open book reviews should form an integral part of your contract management regime. Taking action will contribute to your wider value-for-money objectives.
For more information, please contact Adrian Brook
or Jay Hussain