2.7 In 2010 the OGC transferred into the Cabinet Office's Efficiency and Reform Group. The government began to prioritise savings by using its combined buying power more, and engaging with contractors as a single customer to get a better deal. It deprioritised building departments' individual contract management capability. Many of these issues raised in our 2008 report have recurred in our work on contract management undertaken since 2010. For instance we have recently reported that:
• Department for Work & Pensions (Universal Credit)
The DWP had inadequate financial control over supplier spending on Universal Credit. This includes not fully understanding how spending related to progress, poorly managed and documented financial governance, and insufficient review of contractor performance.30
• Home Office (COMPASS asylum accommodation)
Although they had been operating for almost 1 year, unresolved issues during transition continued to affect provider performance once the contracts began.31 Since then contract compliance and assurance teams are working with operational managers to support performance management. The Home Office reports that issues relating to the key performance indicator regime have been resolved and that property standards are now meeting contractual requirements.
• Department for Work & Pensions (Work Programme)
Flawed contractual performance measures meant the DWP could have had to make incentive payments to even the worst-performing contractors on the Work Programme. In 2014-15 all 40 contracts could have been entitled to £31 million in incentive payments but the DWP estimated that only £6 million would be payable using a more accurate performance measure.32 The DWP is now preparing to renegotiate the contracts and expects to improve the link between incentive payments and performance.
• HM Revenue & Customs (Aspire ICT)
The Department was overly dependent on the technical capability of the Aspire suppliers between 2004 and 2012, which limited its ability to manage the contract commercially.33
• Department of Health (PFI hospitals)
Some trusts had not devoted sufficient resources to contract management; for example, 9 of the 76 PFI contracts had no one assigned to contract management.34
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30 Comptroller and Auditor General, Universal Credit: early progress, Session 2013-14, HC 621, National Audit Office, September 2013.
31 Comptroller and Auditor General, COMPASS contracts for the provision of accommodation for asylum seekers, Session 2013-14, HC 880, National Audit Office, January 2014.
32 Comptroller and Auditor General, The Work Programme, Session 2014-15, HC 266, National Audit Office, July 2014.
33 Comptroller and Auditor General, Managing and replacing the Aspire contract, Session 2014-15, HC 444, National Audit Office, July 2014.
34 Comptroller and Auditor General, The performance and management of hospital PFI contracts, Session 2010-11, HC 68, National Audit Office, June 2010.