7. The Ministry of Justice told us that, during the time of overcharging on electronic monitoring contracts, it had considered that the highest risks were with the negotiation of new contracts, as opposed to the management of 'live' contracts. The attention of senior managers in the department was therefore on new contracts and the Ministry acknowledged that "the energy and effort of people was at a lower level on those live contracts, and that is certainly the lesson that electronic monitoring taught us."[10] The NAO report also highlighted how senior governance mechanisms were focused on approving new projects rather than monitoring existing ones, and that senior managers had not taken contract management seriously.[11] The Cabinet Office told us that the involvement of senior managers in contract management across government has been patchy. The Cabinet Office also spoke of a culture in the civil service where "the glamour was in the procurement, and contract management was just handed off to 'the business'. They all wanted to do the next procurement".[12]
8. One of the Cabinet Office's external crown representatives contrasted this level of engagement with direct accountability in the private sector. He told us that senior managers responsible for strategically important contracts should be "waking up at 2 a.m. worrying about them" and that stronger accountability and sanction at senior management level was required.[13] Both the Home Office and the Ministry of Justice agreed that clear accountability over contracts is important.[14]
9. Recommendation: Accounting Officers remain accountable for spending throughout the life of contracts. They should put in place an accountability framework for contracts which specifies how senior oversight of major contracts should work in practice-including the information needed to scrutinise and challenge contractor performance, cost and progress in making further savings-and the personal responsibilities of senior managers, with appropriate sanctions and rewards for performance.
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10 AQ 125
11 C&AG report, Transforming government's contract management, Paragraph 12
12 BQ 79, 95
13 BQ 141-143
14 AQ 222