13 March 2020 | Prithvi Pandya
A report by the Institute for Government (IfG) warns that Prime Minister Boris Johnson's government risks "another Carillion" if it doesn't get behind the reforms put forward after the firm's liquidation.
The latest IfG report found that departments regularly ignore sensible guidelines on publication of commercial 'pipelines', about how risk is allocated between government and suppliers, and how bids for contracts are selected.
This means that the government is still signing risky contracts that may well collapse.
The guidelines also do not apply to local government and public bodies, including the NHS, despite those organisations being responsible for over £100bn of procurement spending.
The IfG says that since Carillion's demise, the Cabinet Office has trained 8,000 officials on how to implement its new guidelines and has won support from big suppliers, but implores the Johnson government to do more to prove that it is serious about changing the way it handles big projects.
The report calls on the government to:
Appoint a cabinet office minister to be responsible for improvements in outsourcing;
Use this summer's spending review to give the Cabinet Office funding to support and scrutinise contracting by departments;
Extend contracting training to local government, the NHS, and other public bodies; and
Equip the new Audit, Reporting and Governance Authority with the statutory powers recommended by the Kingman review, including to force changes in company accounts rather than applying to the court to do so.
When Carillion collapsed in 2018 it held more than 400 public sector contracts.