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Powered by article titled “Coalition’s £56m a day bill to private companies” was written by Polly Curtis and Simon Rogers, for The Guardian on Monday 30th May 2011 21.30 Europe/London

The coalition has contracted private companies at the rate of nearly £56.6m a day since January, according to a Guardian analysis of government documents that casts new light on the extent of Whitehall’s reliance on firms to do its work.

Nearly 3,000 contracts have been awarded this year, including a burgeoning bill for the government’s reforms. They include unexpected costs arising out of the coalition’s “bonfire of the quangos”, new Whitehall advisers for “free” schools and contracts worth hundreds of thousands of pounds to help reform GP commissioning.

The Department for Education has tendered for “lead advisers” to support its reforms in free schools and academies while the Audit Commission, scrapped by the government, has had to spend thousands more because of its stalled closure.

There are four consultancy contracts to “aid the transition” to GP commissioning, a central part of the health bill. They are collectively worth up to £300,000. The government is conducting a so-called listening exercise during a natural pause in the legislation, which was set up in response to widespread opposition.

The details emerged amid 2,849 contracts each worth more than £10,000 signed by ministers since the turn of the year, revealing for the first time the rate and pace of government outsourcing.

On average contracts are being signed at a rate of £56.6m a day. There is some evidence of a spike in spending in the runup to the end of the financial year deadline of 1 April.

In March there was a small increase in the number of contracts awarded, though their value was not significantly higher. The Treasury is known to have suspected that some departments were applying a “use it or lose it” policy to their spending, and even fined one department, the Foreign and Commonwealth Office, £20m based on those suspicions.

On the government’s busiest day, 4 April this year, it signed 79 contracts with a collective value of £242.8m. They included contracts for handheld radios at the Ministry of Justice, toilet maintenance in Forestry Commission parks and the dispensing of HIV medicines. The bulk came from a £200m plan for apprenticeships in support services for the forces, signed by the Ministry of Defence.

The details of the four new NHS contracts to “aid the transition to GP commissioning” come after the Guardian revealed last month that David Nicholson, the chief executive of the health service, had written to his staff suggesting that they should “maintain momentum” for the planned changes, despite the consultation process that is under way and signs that the legislation will be substantially rewritten.

The Department of Health said the listening exercise was genuine and the contracts were “not specific” to the legislation.

“They are part of our ongoing work to support and engage frontline GPs. We do this regardless of current reforms, and have done for a long time,” it said.

But John Healey, the shadow health secretary, said the contracts added to confusion over the government’s plans. “It’s been clear throughout the ‘pause’ period that the government will plough on with its NHS plans. The mixed messages we’re hearing from David Cameron, Nick Clegg and Andrew Lansley are merely another part of their mishandling of the NHS.”

Private contracts

Treasury and culture

The Treasury spent £532,767 on desks for its Westminster offices, the contracts, which span the surprising and mundane, reveal. The new workbench-style tables will allow more people to work from the 1 Horse Guards Road grade II listed building as part of a project to reduce the costs of running the department and allow for hotdesking in future years.

The spirit of the royal wedding seems to have inspired the Department for Culture, Media and Sport (DCMS). Last month it tendered for a contract worth £50,000 to £100,000 for “decorative rope-work flagpole adornments” for ceremonial use on The Mall.

The National Gallery tendered for a £22,000 reception for its trustees described as an “evening reception for guests who provide generous support for the gallery”.

Audit Commission

Ministers have been forced to pay thousands of pounds after the botched closure of the local government spending watchdog. Eric Pickles, the communities secretary, announced the commission’s abolition last August. It and it was on the list of the coalition’s “bonfire of the quangos”. S, ince then the closure date has slipped repeatedly and employees of the slimmed-down operation do not know its termination date. Government contracts show that after it scaled back its human resources, it reopened its graduate recruitment scheme when it became apparent it would last a little longer and so had to pay £30,000 to an outsourced firm to conduct its recruitment process.

Separately, the Department for Communities and Local Government has this month awarded a £99,838 contract to the international consultants FTI Consulting to carry out a one-month research project into the future of local audit.

School Olympics

The DCMS is advertising for a commercial rights adviser to sell advertising and sponsorship for the school Olympics. The contract, tendered in April, invites people to bid to run the commercial operation, meeting all the expenses of the rights operation, and being remunerated on a payment-by-results model from a percentage of the income generated.It is understood that the culture secretary has expressed an interest in Sainsbury’s being involved. It comes just weeks after the Department for Education paid £10,000 for survey work to inform an independent review, which is under way, into the commercialisation and premature sexualisation of childhood. © Guardian News & Media Limited 2010

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