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Government faces first post-Carillion outsourcing test with £12bn of cleaning and maintenance contracts

Outsourcers like Carillion provide a huge number of services to schools, hospitals and local councils - REUTERS
Outsourcers like Carillion provide a huge number of services to schools, hospitals and local councils - REUTERS

The Government faces the first acid test of an ambitious plan to spread the risk of public services contracts, as it launches a £12bn tender to carry out cleaning and maintenance at schools, hospitals and other public buildings.

The Crown Commercial Service, which administers work on behalf of Government departments, local ­authorities and the NHS, wants the new framework to give more jobs to regional companies as part of a Government drive to give a third of public sector work to SMEs by 2020.

Pressure on civil servants to reduce the Government’s reliance on large companies to carry out public services has been heightened after the collapse of outsourcer Carillion last week.

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The firm was responsible for serving thousands of school meals, building hospitals and maintaining homes for military families. The contracts will cover a raft of services across the country from next year when the existing framework expires.

Carillion collapse | Current government projects
Carillion collapse | Current government projects

Never before have so many of these types of contracts been procured at once, according to public sector data analysts Tussell. The contracts for the new framework are yet to be published, but tender documents reveal that the values could range from £500 to £1.4bn, for services as diverse as tree surgery, snow and ice clearance and managing hazardous waste.

But targeting such a broad range of suppliers throws up a potential management nightmare for civil servants, who have struggled to maintain oversight of outsourced work in the past.

Roger Barker, the head of corporate governance at the Institute of Directors, said this was one of the reasons why large providers such as Carillion had won much of this type of work.

“[Large contractors] may be a necessary evil, but if we’re going to continue with this market structure then we have to rebuild confidence,” he said.

“Ideally we would like to see more small businesses awarded these public contracts, but there is a lack of expertise and capability in the civil service to roll that out on a major scale.”