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Author Topic: Carillion - railway contractor / public services provider - financial concerns, 2017/18, now in liquidation  (Read 13152 times)
ellendune
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« Reply #90 on: July 09, 2018, 07:35:02 am »

Report in today's Gaurdian Carillion collapse exposed government outsourcing flaws – report about the Public Account Committee review.  Seems to have wider implications including for franchising.  Here is an extract

Quote
The report, published on Monday, found that ministers try to spend as little money as possible when awarding contracts while forcing contractors to take unacceptable levels of financial risk.

Often the government does not fully understand the risks it is transferring to private companies, the committee says. It also fails to appreciate differences in quality provided by rival bidders because procurement decisions are driven by price.

As a result, public services have deteriorated as companies concluded that cost, rather than quality of services, is the government’s consistent priority.

Sir Bernard Jenkin, the Conservative MP who chairs the committee, says: “It is staggering that the government has attempted to push risks that it does not understand on to contractors and has so misunderstood its costs. It has accepted bids below what it costs to provide the service, so that the contract has had to be renegotiated.”
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