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The UK government has been unable to demonstrate taxpayers were getting value for money from the £259bn spent on public procurement in 2021-22, according to across-party group of MPs.
In a damning assessment published on Wednesday, the House of Commons public accounts committee blamed “significant issues” with the quality and completeness of data on contracts for the failure of ministers to be able to prove they were spending public funds wisely.
In addition, it said departments were not doing enough to ensure competition for contracts was “robust”, resulting in taxpayers’ money being wasted.
“Around a third of the total contract value of more than £100bn awarded by major departments during 2021-22 were not subject to competition, though estimates suggest this could achieve savings of up to £7.7bn per year,” the committee said.
Dame Meg Hillier, chair of the committee, urged the Cabinet Office to “act swiftly to dispel any continuing lack of transparency around publicly funded contracts” so taxpayers could see how their money was being spent.
Government departments and other public bodies are required to publish information on prospective and awarded contracts on two databases, Contracts Finder and Find a Tender.
About 6 per cent of large contract award notices published on Contracts Finder in the five years until 2022 did not have basic information on the procurement procedure used, the report said. By publishing more details, the government could create more competition and achieve better prices for services, it added.
Out of 235 large contracts recorded on Find a Tender between January 2021 and January 2023, 20 per cent of contracts using open competition received only one bid, according to the report.
The report also criticised the increased use of framework agreements, which shorten the procurement process by having a preapproved list of suppliers with certain terms and conditions and legal protections agreed in advance.
These agreements accounted for 68 per cent of all contracts in 2022, up from 16 per cent in 2019. The committee warned that their “inappropriate” use may be limiting competition and failing to allow smaller suppliers to compete.
The committee said the new procurement act, which became law in October, offered “opportunities for improvements” but the report raised concerns that the public sector may lack the critical commercial skills required to “achieve the intended far-reaching changes”.
The findings follow heavy criticism of government procurement particularly during the Covid pandemic, including the use of a VIP lane for potential suppliers of personal protective equipment who had links to politicians or government officials. A court ruled last year that the priority lane set up to collate PPE bids was unlawful because it failed to comply with public contract regulations.
Earlier this year, research submitted to the official inquiry into the UK government’s handling of the pandemic found that the details of Covid-19 contracts worth more than £8bn had not been published.
The Cabinet Office said: “Value for money is always the number one priority, and our specialist teams have saved the taxpayer £2.9bn in the last year. Our new procurement act will also help us to improve data quality and analysis when assessing bids, while our commitment to transparency means all contracts are published online for public scrutiny.”
