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Private providers must open books, says CBI

05/03/14

Employers group the Confederation of British Industry today proposed new measures to boost transparency in private and third sector managed public services contracts. They include 'open book' relationships and publishing all government contracts online.

According to the CBI the government spends £187 billion a year with 200,000 private firms managing public services. However, reflecting growing calls for private contractors to be covered by the freedom of information act, it said "the industry recognises that it must work hard to boost public confidence in order to be able to do its job in this sector".

John Cridland, director-general, said: "The public services industry is a great British and international success story. Not only has it helped the UK public sector lower its costs while improving services, it's also an important fast-growing part of our economic renaissance, contributing tens of billions of pounds to our economy. But public services businesses recognise that they operate in an industry which rightly demands close public scrutiny, which is why we are unveiling a range of measures to boost transparency and accountability.

"We can't ignore the fact that confidence in the sector has been badly hit by several high-profile failures and that it will take time and meaningful change to rebuild it. That said, we must not let anti-business rhetoric tar the public services industry as a whole, because the UK needs the expertise, investment, growth and job creation which these innovative firms bring to our economy."

The CBI's recommendations on transparency include:

- In contract negotiations, contractors and their customers should discuss how to release information proactively and in response to public enquiries, but also make the information released as accessible and comparable as possible.
- All government contracts should be published online, as long as the customer is happy for this to happen. When a contract isn not published or is in any way redacted, there should be a clear explanation of why this has been done and at whose request
- In every contract negotiation, there should be a presumption in favour of open book accounting. In practice, this means a full and frank discussion between the contractor and its public sector customer about the contractor's profit margin. Profit information should include the value or savings being delivered
- The National Audit Office should be able to audit government contracts with the private sector. This should take place on a structured and systematic basis, to avoid adding a regulatory burden which will increase the cost of services.

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