UK ministers are unable to prove that £259bn spent on procurement was wisely spent

According to a cross-party group, the UK government was unable to prove that taxpayers received value for money on the £259bn it spent in public procurement between 2021-22.

In a damning report published on Wednesday by the House of Commons Public Accounts Committee, it was alleged that ministers were unable to demonstrate they spent public money wisely because of “significant problems” with data quality and completeness.

It also said that departments did not do enough to ensure “robust” competition for contracts, resulting in the waste of taxpayers’ dollars.

The committee stated that “around a third” of the contract values of over £100bn, awarded by the major departments in 2021-22, were not subjected to competition. However estimates indicate this could result in savings of up £7.7bn each year.

Dame Meg Hillier chaired the committee and urged the Cabinet Office “to act swiftly in order to eliminate any continued lack of transparency surrounding publicly funded contracts”, so that taxpayers can see how their money is being spent.

Departments and other public agencies are required to post information about prospective and awarded contract on two databases: Contracts Finder, and Find a Tender.

The report stated that about 6 percent of the large contract award announcements published on Contracts Finder between 2012 and 2022 lacked basic information regarding the procurement procedures used. The report added that by publishing more information, the government can create more competition and obtain better prices for service.

According to the report, out of 235 large contract records on Find a Tender from January 2021 through January 2023, 20% of contracts that used open competition only received one bid.

The report also criticised an increased use of framework contracts, which reduce the procurement process through a list of preapproved suppliers who have agreed to certain terms and conditions as well as legal protections in advance.

In 2022, these agreements will account for 68 percent of all contracts. This is up from 16 percent in 2019. The committee warned their “inappropriate use” may limit competition and prevent smaller suppliers from competing.

The report said that while the new Procurement Act became law in October this year, there are “opportunities to improve” the act. However, it also raised concerns about the lack of commercial skills within the public sector.

The findings come after heavy criticisms of government procurement, particularly during the Covid epidemic. This included the use of VIP lanes for potential suppliers who had connections to politicians or officials. Last year, a court found that the priority lane used to collect PPE bids violated public contract regulations because it did not comply with government procurement regulations.

In a report submitted earlier this year to an official inquiry into how the UK government handled the pandemic, it was found that details of Covid-19 contract worth more than £8bn had not been released.

Cabinet Office stated: “Value-for-money is always our number one priority. Our specialist teams saved the taxpayer £2.9bn last year. The new procurement act also helps us improve data quality, analysis and evaluation when assessing bids. Our commitment to transparency ensures that all contracts are made public online.

Cabinet Office also disputed committee’s £100bn number and said that it “doesn’t account for many of these contracts being extensions of existing contracts which have already gone through open competition or open procurements with only one bidder”.