New findings that a handful of large companies hoover up lucrative public sector contracts and win multi-million pound deals stretching over decades in some cases will not be a surprise to anyone with even a passing interest in the workings of local government in this country.
A report by the Taxpayers’ Alliance has found that the UK spends almost double the rest of the EU on large procurement contracts, with 167 deals worth more than 100 million euros compared to just 29 in France and only five in Germany.
Other European nations have been much more successful in signing deals with small and medium-sized businesses that appear to offer greater accountability – and value.
The dangers of signing up to giant contracts that leave councils, and by extension taxpayers, over-reliant on the work of one firm has been exemplified in Yorkshire through the £2.2bn deal with Amey to make highway improvements in Sheffield over 25 years.
Last week, Sheffield Council said that unless work to remove 500 street trees as part of the contract was completed by New Year, the authority would face penalties under the deal which would have “catastrophic financial consequences”.
If the scenario the council is describing is correct, it highlights the dangers of entering into a contract where power appears to lie with the contractor rather than the customer – a local authority allocating public money in this instance.
In some cases, it will be necessary for large firms to be used for public sector work, but the example of our European neighbours shows this should not automatically be the case.