New law to rein in PPP fraudsters

Greedy firms which deliberately defraud lucrative public services contracts should be punished under new laws, an influential committee of MPs has recommended.

In its report into public services reform published today, the Public Administration Select Committee has recommended tough new rules to ensure that people get top-quality schools, hospitals, police services and transport – and that there are proper sanctions against those who deliberately fail the public.

The committee report urges the Government to include a new Public Service Code in all invitations to tender and contracts, including those under the controversial Private Finance Initiatives and Public Private Partnerships like the one currently being agreed for London Underground.

The Code would put legal obligations on public employees and private firms working in public services to be open, accountable, provide quality and reliability.

"Proper redress should be made where maladministration has taken place," the report says.

It also calls for a Public Service Academy to be set up to increase training for people working in key public services.

The chairman of the committee, Dr Tony Wright, said: "Our proposals would give ammunition in the courts if necessary, to those who want to prevent private contractors from profiteering but also to those who wish to ensure that public sector employees pay attention to the users' needs.

"There must be no room in public service for private corner-cutting – or for overmighty producer interests."

MPs suggested the new code and the obligations contained within it should form a part of the proposed Civil Service Bill.

The Committee's report is also critical of the Government's failure to work out properly its policy on the use of private firms in the public services.

The report says: "It is not clear whether the private sector is seen as a remedy for particular cases of public sector failure or as a routine ingredient of public service provision."