The government’s wasting £50m a year on technology that doesn’t work
The founder of electronic tagging company Buddi, Sara Murray, has said this morning that the government’s "wasting £50m a year by buying old technology from Serco and G4S that doesn't work."
Her words follow those of Margaret Hodge, chairman of the Public Accounts Committee, who said the government “urgently needs to get its house in order” when it comes to its outscourcing contracts.
MPs have called for more transparency requirements, but Hodge stressed today that the government’s system needs a serious overhaul.
She criticised the lack of openness around the securing of government contracts, following the Serco and G4S scandals – where the firms were able to overcharge the government for the electronic tagging of prisoners who were in prison, hadn’t been tagged to start with, or dead.
For years, small and medium-sized firms, and numerous others, have complained that the majority of business is given to the big four private sector contractors.
Speaking on Radio 4 this morning, Murray said she walked aware from the bidding process for a Ministry of Justice Contract because of the up-front costs. She also said the words she heard most often were “high risk” – “it’s just too high risk to contract with you”.
The government has managed to claw back £179.5m in compensation from the Serco and G4S and, after Serco and G4S were barred from bidding for government contracts, the international outsourcing group Capita took over responsibility for the so-called tagging contracts in December.
Capita will assist the coalition’s plan to introduce new, state-of-the-art satellite tagging, which'll save time and money when it comes to tracking criminals, and policing, it says.
But despite the move towards more technologically innovative outsourcing, Murray’s words leave lingering concern about variety and competition.
Although Serco and G4S are both still being under investigation by the Serious Fraud Office, Serco’s ban was lifted at the beginning of February, and it secured a £15m deal with the Ministry of Defence 10 days later.
In January, former transport secretary Andrew Adonis called for governments to contract “to a far greater degree with small businesses”. Writing in City A.M., he said:
A new Small Business Administration (SBA) should promote state contracting with smaller firms, as does the SBA in the US, not least by monitoring and publishing how well departments and agencies are doing in contracting with small businesses.
Small companies need a better deal from the banks, and a cut in red tape. Government can, and should, help small businesses by contracting with them, driving growth and innovation.