Government spending with charities plateaus as more goes to private sector
Central and local government spending with charities has stagnated in recent years, while private sector procurement has increased, according to a new report from the Institute for Government (IfG). In particular, the report says that government spending with large outsourcing specialist firms such as Capita, Carillion and Amy (and, we imagine, Interserve) has increased greatly in recent years.
The IfG report says many charities are effectively subsidising public services by running a deficit on statutory contracts and says that the largest charities are running the biggest deficits. “In recent years, a number of charities have closed due to losses on government work, most notably 4Children and the Lifeline Project. Like Carillion, both had grown quickly by winning contracts but were unable to generate sufficient returns to service the debt they had incurred to support their expansion.”
The main recommendation the IfG makes is that the government should collect more accurate data on its procurement spending. The report says current data is poor and that better data will enable the government to make better spending decisions, will lower prices, improve accountability, create new markets and expose corruption. It calls for the government to appoints a chief data officer “as a matter of urgency”, who should develop a national data strategy which will include a plan for publishing usable data for every stage of the contracting process.
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