The government’s approach to outsourcing  has been criticised after the high-profile collapse of construction-giant Carillion which was “too big to fail” because of important government contracts.

In its After Carillion report, the influential Commons Public Accounts Committee said the failure of the construction giant exposed fundamental flaws in the government’s approach to contracting.

Apprentices caught up in the demise of Carillion faced not being paid and losing out on being able to finish their training until the Construction Industry Training Board (CITB) stepped in.

The UK’s biggest FE provider Learndirect also came under criticism in the report. The committee said after the training provider received an inadequate Ofsted grade in 2017, normal procedure would have been for the government to cancel its contract.

Public confidence ‘shaken’

However, the committee believes that the Department for Education viewed Learndirect as “too big, and too important to government to be allowed to fail.”

The report said high profile failures have “badly shaken public confidence in outsourcing” and a race to the bottom in terms of costs led to “worse public services as companies have been sent a clear signal that cost, rather than quality of services, is the government’s consistent priority”.

The committee chair Sir Bernard Jenkin, said it is staggering that the government has attempted to push risks that it does not understand onto contractors, and has so misunderstood its costs.

He added: “Public trust requires that outsourcing better reflects public service values. The government must use this moment as an opportunity to learn how to effectively manage its contracts and relationship with the market.”