The IfG found mistakes in the setting up and management of outsourcing in areas such as care for older people, schools, probation and employment services.
Flaws meant some contractors were “gaming” the system, responding in “undesirable ways to the reward structures” including by parking people with complex needs and creaming off payments for the easiest cases.
The government also struggles to force out poorly run companies, “partly as a result of a lack of confidence” that it can manage the switch to a new provider. The report comes after a number of companies have faced intense criticism over the way they have handled highly lucrative government contracts.
As a general rule I think Governments are better focused on making markets (i.e. setting rules) rather than participating in them. It astounds me there isn’t more research and discussion about tendering and so on. This report requires real action.