1. Government outsourcing is now more important than ever. This is true not only of the UK but also of most other advanced economies. The Government purchases almost as much from external providers as it spends on its own staff. There are few public services where the Government does not rely, to some extent, on some sort of contractual relationship. (Paragraph 14)
2. At different times, private, charitable and public providers have both succeeded and failed to contribute to successful public services. All the witnesses to our inquiry accepted that the public sector should buy in some goods or services from the private sector, and should insist on providing others internally. The public sector should not contract out the final decision making about policy. The public sector always retains responsibility for the entitlement of individuals to benefits or services. Whether ordinary services should be outsourced though will depend upon the capacity of the public sector, private sector or voluntary sector to deliver them, the comparative cost, and ultimately, the value that each provider can produce. (Paragraph 23)
3. There was a consensus among the witnesses to our inquiry that the Government should be taking a reasoned, evidence based make-or-buy decision. The Government has set out criteria for this in its Green Book guidance. This decision is not binary between private provision and public provision but should include a number of alternative methods of provision, several of which might involve commissioning the service or providing the service in-house. We heard conflicting evidence about whether the Government consistently follows its own guidance in this respect. It is impossible to tell from the outside whether decisions have been made appropriately. (Paragraph 30)
4. It is intolerable that the Government is spending £250 billion with little evidence that it is currently following its own procedures to secure value for money. The business case procedure set out in the Treasury's Green Book provides a suitable basis for making decisions about whether and how to let contracts. However, we are concerned by the evidence of the Comptroller and Auditor General that this is not always followed. The Cabinet Office and Treasury should ensure that all contractual decisions are based on a sound business case and in accordance with the guidance laid out in the Green Book. (Paragraph 31)
5. Public trust in outsourcing has been seriously damaged recently. This is due to a number of high profile failures-including most recently the failure of Carillion. The Government needs to rebuild trust in the process by which it makes decisions about outsourcing. The Government can only achieve this by being transparent about how and why it decides to purchase a good or service. Especially in cases where private sector involvement or the type of commissioning is novel, the Government should publish its rationale for the decision and notify the relevant select committee. This might take the form of a published business case, for example. (Paragraph 32)
6. The Government must produce evidence about the advantages and disadvantages of purchasing from the private or third sector in different public services. This should include an assessment of the cost and quality advantages and disadvantages of purchasing services. The Government should establish a centre of excellence for research into applied contracting (for example, through establishing a new "What Works Centre"). (Paragraph 36)