The cheaper, the better

Public sector finance: Paul Gosling on new guidelines for contracting

New draft guidelines to be announced this month by the Government should make it easier for businesses to win local authority contracts. The Department of the Environment will propose reducing the de minimis limit for contracts, below which competitive tendering is not required. Contractors have complained that councils have split work into small contracts, each under the de minimis limit, to avoid compulsory competitive tendering (CCT) rules.

The DoE has been intensively lobbied by the private sector to remove barriers to open competition. There has been particular annoyance within the private sector at the few contracts councils awarded under white collar CCT, after businesses invested heavily to win work.

Last month, the DoE took a decisive step to push councils to award more out-of-house work by shifting the emphasis from quality to price. Councils now have less scope to reject bids on the grounds of failure to meet quality thresholds. Unless there is evidence to the contrary, authorities must assume that reasonably priced bids from the private sector will meet quality specifications.

Councils will also have to demonstrate they have not put private contractors at a disadvantage in the tendering process. The Environment Minister Sir Paul Beresford says that all complaints of councils' anti-competitive behaviour will be fully investigated.

Cliff Davis-Coleman, secretary of both the Public Contractors Association and the Housing Management Association, which led the lobbying of the Government, said the amendments to the regulations meet almost all of their concerns. "On the whole, we are pretty satisfied," Mr Davis-Coleman said.

The main area where contractors remain unhappy is over the specification of information technology systems. Contractors want more freedom to choose which IT systems they use, rather than be bound by those already adopted by authorities.

But what pleases the contractors seldom pleases councils. "The changes are completely unnecessary. We are not convinced that authorities have been behaving anti-competitively. It will make it more difficult for authorities to win contracts in-house," said Lesley Courcouf, public services assistant secretary at the Association of Metropolitan Authorities.

Ms Courcouf is equally worried that councils will now have less say in the way contracts are carried out, and she expects performance standards to fall. "We say they should be able to ask contractors for their method systems, to explain how they would do certain types of work." But this will be more difficult under the new rules, she believes.

The trade unions go further, accusing the Government of recklessly forcing the public sector to contract-out more work in the run up to a general election they expect to lose, as a farewell favour to business. Colin Meech, of the trade unions' Privatisation Research Unit, described the process as the Tories' "scorched earth" policy.

Bradford council has found that, in practice, the CCT policy has often had the opposite effect to that intended. The tendering process for housing management contracts cost Bradford pounds 1m, yet failed to attract a single outside bidder. Meanwhile, small and medium-sized local contractors have been squeezed out by bigger outsiders, particularly French corporations. Andy Mudd, chair of Bradford's CCT committee, said: "It is a Trojan horse for Europe-based multinationals."

This view is supported by research conducted for the Equal Opportunities Commission's report on CCT, which found that the policy had lost 74,000 jobs, of which only 12,500 were within councils. The rest were lost within the private sector, as large companies drove out the smaller ones.

But it is clear that CCT has made public services more efficiently delivered. The Chartered Institute of Public Finance and Accountancy (Cipfa) last week published a survey of the effects of CCT, and its equivalent within government departments, market testing.

Contrary to received wisdom, the survey found that service quality was improved by competitive bidding. It also confirmed research that significant savings could be achieved, varying from 5 to 50 per cent, according to Cipfa.

None the less, the survey did find that savings and improvements were generally greater within government departments than in local authorities. This might be explained, said the report, by opposition to CCT by councils, limiting the benefits of competition. More likely, it was because there has been greater scope of savings and efficiency improvements in central government, which, the survey recognised, has often been less well run than local government.

Evidence that ministers and senior civil servants were keener to overhaul local authorities than to sort out their own ministries, will come as no surprise to people in local government. It is what they have been saying for years.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
The Banksy image in Folkestone before it was vandalised
people
Life and Style
tech

Sales of the tablet are set to fall again, say analysts

Sport
football West Brom vs Man Utd match report: Blind grabs point, but away form a problem for Van Gaal
Arts and Entertainment
Gotham is coming to UK shores this autumn
tvGotham, episode 2, review
PROMOTED VIDEO
News
i100
Arts and Entertainment
Bloom Time: Mira Sorvino
tvMira Sorvino on leaving movie roles for 'The Intruders'
News
First woman: Valentina Tereshkova
peopleNASA guinea pig Kate Greene thinks it might fly
News
Brian Harvey turned up at Downing Street today demanding to speak to the Prime Minister
news

Met Police confirm there was a 'minor disturbance' and that no-one was arrested

Arts and Entertainment
George Lucas poses with a group of Star Wars-inspired Disney characters at Disney's Hollywood Studios in 2010
films

George Lucas criticises the major Hollywood film studios

Voices
Chris Grayling, Justice Secretary: 'There are pressures which we are facing but there is not a crisis'
voices

Does Chris Grayling realise what a vague concept he is dealing with?

Life and Style
A street vendor in Mexico City sells Dorilocos, which are topped with carrot, jimaca, cucumber, peanuts, pork rinds, spices and hot sauce
food + drink

Trend which requires crisps, a fork and a strong stomach is sweeping Mexico's streets

Life and Style
The charity Sands reports that 11 babies are stillborn everyday in the UK
lifeEleven babies are stillborn every day in the UK, yet no one speaks about this silent tragedy
News
Blackpool is expected to become one of the first places to introduce the Government’s controversial new Public Space Protection Orders (PSPOs)
news

Parties threaten resort's image as a family destination

Life and Style
Northern soul mecca the Wigan Casino
fashionGone are the punks, casuals, new romantics, ravers, skaters, crusties. Now all kids look the same
Life and Style
gaming

I Am Bread could actually be a challenging and nuanced title

News
Nigel Farage has backed DJ Mike Read's new Ukip song
i100
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Customer Service Executive / Inbound Customer Service Agent

    £18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...

    ASP.NET Web Developer / .NET Developer

    £60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....

    Operational Risk Manager - Asset Management

    £60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

    Project Coordinator - 12 month contract

    £27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...

    Day In a Page

    Oscar Pistorius sentencing: The athlete's wealth and notoriety have provoked a long overdue debate on South African prisons

    'They poured water on, then electrified me...'

    If Oscar Pistorius is sent to jail, his experience will not be that of other inmates
    James Wharton: The former Guard now fighting discrimination against gay soldiers

    The former Guard now fighting discrimination against gay soldiers

    Life after the Army has brought new battles for the LGBT activist James Wharton
    Ebola in the US: Panic over the virus threatens to infect President Obama's midterms

    Panic over Ebola threatens to infect the midterms

    Just one person has died, yet November's elections may be affected by what Republicans call 'Obama's Katrina', says Rupert Cornwell
    Premier League coaches join the RSC to swap the tricks of their trades

    Darling, you were fabulous! But offside...

    Premier League coaches are joining the RSC to learn acting skills, and in turn they will teach its actors to play football. Nick Clark finds out why
    How to dress with authority: Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear

    How to dress with authority

    Kirsty Wark and Camila Batmanghelidjh discuss the changing role of fashion in women's workwear
    New book on Joy Division's Ian Curtis sheds new light on the life of the late singer

    New book on Ian Curtis sheds fresh light on the life of the late singer

    'Joy Division were making art... Ian was for real' says author Jon Savage
    Sean Harris: A rare interview with British acting's secret weapon

    Sean Harris: A rare interview with British acting's secret weapon

    The Bafta-winner talks Hollywood, being branded a psycho, and how Barbra Streisand is his true inspiration
    Tim Minchin, interview: The musician, comedian and world's favourite ginger is on scorching form

    Tim Minchin interview

    For a no-holds-barred comedian who is scathing about woolly thinking and oppressive religiosity, he is surprisingly gentle in person
    Boris Johnson's boozing won't win the puritan vote

    Boris's boozing won't win the puritan vote

    Many of us Brits still disapprove of conspicuous consumption – it's the way we were raised, says DJ Taylor
    Ash frontman Tim Wheeler reveals how he came to terms with his father's dementia

    Tim Wheeler: Alzheimer's, memories and my dad

    Wheeler's dad suffered from Alzheimer's for three years. When he died, there was only one way the Ash frontman knew how to respond: with a heartfelt solo album
    Hugh Bonneville & Peter James: 'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'

    How We Met: Hugh Bonneville & Peter James

    'Peter loves his classic cars; I've always pootled along fine with a Mini Metro. I think I lack his panache'
    Bill Granger recipes: Our chef's heavenly crab dishes don't need hours of preparation

    Bill Granger's heavenly crab recipes

    Scared off by the strain of shelling a crab? Let a fishmonger do the hard work so you can focus on getting the flavours right
    Radamel Falcao: How faith and love drive the Colombian to glory

    Radamel Falcao: How faith and love drive the Colombian to glory

    After a remarkable conversion from reckless defender to prolific striker, Monaco's ace says he wants to make his loan deal at Old Trafford permanent
    Terry Venables: Premier League managers must not be allowed to dictate who plays and who does not play for England

    Terry Venables column

    Premier League managers must not be allowed to dictate who plays and who does not play for England
    The Inside Word: Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past

    Michael Calvin's Inside Word

    Brendan Rodgers looks to the future while Roy Hodgson is ghost of seasons past