1 In November 2013 we set out how government was facing what we described as a crisis of confidence in its contracting of public services. Contracting out services is a useful tool to reform public services and improve value for money. However, we raised questions about competition in the market for government services and whether contractors' returns were transparent and their performance satisfactory. We also showed how government must improve oversight, control and assurance over contracted-out services.
2 Last year, a series of government contractor and contract management failures emerged. In particular, the Ministry of Justice announced in July 2013 that it had found significant overbilling in its electronic monitoring contracts with G4S and Serco dating back to 2005. The Ministry commissioned further reviews of their other contracts and the Cabinet Office did the same for the major G4S and Serco contracts across government. The Home Office and the Department for Work & Pensions also commissioned internal reviews of contracts with a range of contractors. In total, central government tested 60 contracts for overbilling and 73 for contract management practice.
3 The reviews found widespread problems in administering government contracts, including poor governance, record keeping and capacity issues. These findings echo our work on contracts and contract management dating back to 2006. The reviews recommended how the new Crown Commercial Service (CCS) and departments could improve contract management.