A review of procurement risks in local government is to be carried out as part of a UK anti-corruption strategy.
The review, which will take place by the end of 2018, is part of a package of measures unveiled by the government that includes ensuring the publication of contract award notices, investigating possible cartels and strengthening capability within contracting authorities.
The UK Anti-Corruption Strategy 2017-2022 outlined a goal of “greater procurement transparency, enabling better identification and mitigation of corruption risk”, while the government would promote an “open by default culture in public contracting at home and internationally”.
The report said the government would “encourage procurers to investigate and report possible cartels” and use data analytics to check for fraud.
Public sector procurement accounted for around a third of total government spending in 2016 and “this level of expenditure, together with the levels of interaction between officials, business and other stakeholders, creates risks of corruption and fraud that need to be effectively managed”, said the report.
The report highlighted a 2009 case when more than 100 construction firms were fined a total of £129.5m for bid-rigging on 199 tenders between 2000 and 2006. The projects included schools, hospitals and universities. The investigation, sparked by a complaint from an NHS auditor in Nottingham, uncovered evidence of cover pricing, where firms submit artificially high bids that are not intended to be successful, in more than 4,000 tenders involving over 1,000 companies.
The report said buyers would be given guidance to identify and tackle corruption in tender processes, while a trial of conviction checks for bidders in the Crown Commercial Service would start in December 2017.
“By February 2018 we will produce and disseminate guidance to government procurers on applying exclusions in the procurement process, managing conflicts of interest and whistleblowing,” said the report.
It added: “In the last six years the UK government has taken significant steps to strengthen its commercial capability, especially in procurement so that commercial activities deliver value for money and risks are managed effectively.
“We have strong systems in place to detect and tackle corruption but the nature of this activity demands ongoing effort to maintain our capability in both central and local government.”
Home secretary Amber Rudd said: “The damaging influence of corruption cannot be stopped overnight. A sustained, shared effort however, as set out in this strategy, will help to build a fairer, safer society in the United Kingdom, and will safeguard our long-term prosperity.”
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