16. In response to the overbilling crisis on electronic monitoring, the Cabinet Office undertook a review of contract management and required all departments to prepare contract management improvement plans.[28] In its comparison of the responses by two departments, the NAO reported that the Ministry of Justice had started from a weaker position than the Home Office, but had responded promptly, with a more comprehensive improvement plan.[29] The Ministry of Justice told us its plan is focusing on strengthening senior leadership, and providing commercial training for its senior civil service staff. The Ministry has also put specific arrangements in place for more senior oversight and challenge of operational contracts and both the executive team and departmental board are more focused on the issue. The Ministry assured us that it would scale back its outsourcing activity if it did not have the commercial capability to manage it effectively.[30]
17. The Home Office described how its plan is focusing on training for commercial staff. It has also established a Portfolio and Investment Committee to extend senior scrutiny beyond just new procurements to cover operational contracts. The Home Office told us that it has drawn from the NAO's comparative analysis to adopt some of the Ministry's practices, such as a scorecard for each major contract.[31] It acknowledged that part of its problems lie outside its commercial directorate, in operational performance management of suppliers. It said that both commercial and performance management needed to improve, though so far it has focused on the former.[32]
18. Recommendation: Alongside the Cabinet Office reporting back to us at the end of 2015, both the Ministry of Justice and the Home Office should report back to us specifically on progress with their contract management improvement plans:
. For the Ministry we will be particularly interested in arrangements for running the 'Transforming Rehabilitation' contracts (for outsourcing probation services) which we see as a litmus test for better management of high risk and complex contracts.
. For the Home Office we will be particularly interested in what it has done to extend improvement plans beyond its commercial directorate and into the operational management of contracts.
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28 BQ 101
29 C&AG's report, Home Office and Ministry of Justice, Transforming contract management, Paragraph 40
30 AQq 143-144, 162, 214-5
31 AQq 144, 156, 218
32 AQ 158; C&AG's report, Home Office and Ministry of Justice, Transforming contract management, Paragraph 11