Carillion inquiry: Ministers to consider foreign bidders for public service contracts
The Government could look to foreign firms in a bid to avoid being dependent on a handful of suppliers for key public service contracts in the wake of the Carillion collapse.
Cabinet Office Minister David Lidington said an internal review into the Wolverhampton-based firm involved looking at 'reputable providers outside of the United Kingdom' who could be invited to bid for contracts.
Carillion went into liquidation in January with debts of around £900m and a pension deficit of £590m.
It had 450 public sector contracts at the time, many of which were left in limbo.
Speaking to MPs on the Public Administration and Constitutional Affairs Committee, Mr Lidington addressed concerns that the dominance of a small number of suppliers in the market for some government services.
He said this was particularly the case for 'complex public services where the Government is the only ultimate buyer'.
In that market the top five suppliers have just under 60 per cent of the market, he said, adding: "That does cause some concern, I would like that market to be bigger."
Mr Lidington said he was looking at how to introduce more competitors into the market as part of the Cabinet Office internal review of lessons to be learned from Carillion.
He said he hoped to be able to outline potential changes to be brought in following the review at some point in the next couple of months.
One area where there has been some success in tackling these monopolies is in disaggregating huge IT contracts, the committee was told.
However, Mr Lidington warned that the Government’s target for a third of its procurement spend to go directly or indirectly to small and medium-sized businesses (SMEs) by 2022 was 'very demanding'.
