Open book clauses not used

The civil service must “significantly” improve its ability to understand company accounts if it is to make effective use of open-book contracts, according to government chief operating officer Stephen Kelly and chief procurement officer Bill Crothers.

Paul Heartfield

By Suzannah.Brecknell

27 Nov 2013

Speaking at a hearing of the Public Account Committee (PAC) on Monday, Crothers said that a recent Cabinet Office review of large government contracts showed that a third used open book clauses – which allow departments to access supplier accounts – but in “most” cases civil servants weren’t making use of them.

Kelly added that “it’s easy to say the words ‘open book’, but [to interpret the accounts] you need some accountants and finance people on our side of the table. We need to raise our capability significantly to manage open book” contracts.

The Cabinet Office is developing a “model contract” for all large procurements, Kelly said, and this will include open book clauses, but on top of these clauses “we need to ensure people understand the information they’re getting”.

Committee chair Margaret Hodge had asked the officials for their response to evidence given to PAC last week by four major government suppliers, who said they would be happy to include open book clauses in all contracts with government.

The four outsourcing companies – Atos, Capita, G4S and Serco – also agreed in principle with the idea of extending the Freedom of Information Act to cover their public sector contracts. But Crothers said that further consultation with industry will be needed before any changes can be made in this area.

The companies said that they would be happy for the NAO to have access to their accounts concerning their public sector contracts.

Crothers later said that in order to improve contract management, departments need commercial officers who are “sufficiently experienced and confident to speak up” when they think a contract is unfair or badly constructed. “If we can get our commercial officers to be more confident, I think we’ll go a long way,” he said. “The competence will follow, but I think the confidence is absolutely key.”

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