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September 2011 | Angeline Albert
fraud in the public sector could get worse as a result of government plans to
outsource more services, a trade union has warned.
the public sector workers’ union, claims outsourcing currently contributes to
£1.3 billion of the £2.4 billion annual cost of procurement fraud to the public
sector and fears this amount could rise if proposals to tender more services to
the private sector under the government's Open Public Services white paper are implemented.
union believes the risks will be greater because there will be more tendering,
which could “create more opportunities for price-fixing, false invoicing and
other forms of fraud associated with public sector outsourcing”, it says. The
current £1.3 billion estimate is made up of £825 million from central
government and £470 million from local government.
also warned contracting with the private sector leads to under-performance and
poor value for money, as well as “costly and disruptive restructuring and
of taxpayers’ cash is wasted during the outsourcing of public services,” said
Dave Prentis, general secretary of Unison. “Many employers have to bring
services back in-house after money, quality and efficiency have gone down the
drain. The taxpayer needs to know the risks employers are willing to take to
sell off services. The government’s open public services white paper can only
lead to the public paying a higher price for fraud. We will continue to
campaign against it.”
Cabinet Office told SM it plans to
respond once Unison has submitted a formal response to the white paper, which
it plans to do later this year.
£2.4 billion cost of purchasing fraud was highlighted in a Cabinet Office
report in June, which showed £1.5 billion lost in central government and £855
million to local government. The analysis was conducted as part of the
government’s Public Services Industry
Review in 2008. This looked at the whole procurement cycle and covered
fraud such as cartel activity and fraudulent invoicing.