The public service ethos – ethical values that drive public servants to improve society – has traditionally resided within the public sector alone. But now that an estimated half of public spending goes to outsourced companies, this is being challenged. Speaking on 24 March, Francis Maude, minister for the cabinet office, said he wanted a “public service ethos in the provision of public service”, irrespective of the sector. Speaking alongside him, Debbie White, chief executive of Sodexo UK and Ireland, unveiled her firm’s new public service pledge, describing it as an ethical manifesto for Sodexo’s public contracts.
Sodexo’s 34,000 employees work across prisons, defence and healthcare, and many are former public-sector workers. White says the pledge is a recognition that running public services is a social as well as a commercial contract. Commitments include independent audits of government contracts, increased recruitment of apprentices and ex-offenders, paying the living wage for head office workers, and annual equal pay audits.
This is, of course, also a PR exercise. Public trust in outsourcing is low following a number of high-profile scandals. “I think we’ve all got a role to play [in restoring public trust]”, says White. “We have seen a change in attention to the private sector … as a result of the G4S and Serco problems.”
Amyas Morse, head of the National Audit Office, went further. In a recent report he said there was a “crisis of confidence” caused by “contractors not appearing to treat the public sector fairly”and that there was a “clear need to reset the ground rules for both contractors and their departmental customers”.
Can private-sector providers be trusted to voluntarily improve through such pledges? Reform, the thinktank, welcomes more transparency. Andrew Haldenby, director of Reform and former Conservative party adviser, believes pledges such as Sodexo’s are both ethically right and lead to better business performance.
But the Public and Commercial Services union (PCS) disagrees. Sodexo’s pledges “range from weak to utterly meaningless”, a spokesperson says, describing it as a publicity stunt from a company “which naturally wants to win more contracts from the government and public bodies.”
Dave Johnson, national secretary for business, community and environment at trade union Unison, was more generous, calling it a “laudable first step”. But he says: “One contractor can’t do it on their own. This should be taken up and pursued through tighter procurement and commissioning regulations for everybody.”
Johnson says companies are compromised by the legal responsibility to create profit and deliver value to shareholders. PCS says obligations to shareholders are incompatible with the ethos of public service, where provision is determined by need, not money. “Private profit drives perverse incentives such as cherry-picking and undercutting,” its spokesperson says.
White laughed off the suggestion and points out that Sodexo is 40% owned by its French founders. “We are not so short-term driven. The second point is that the government is spending taxpayers’ money and must ensure that they’re getting great service at the most appropriate cost. I think outsourcing has a very strong role to play in driving best practice.”
While voluntary commitments help to raise the bar, Unison’s Johnson believes far more progress could be made through legislation. “In procurement regulations we have the opportunity to lay down moral, social, ethical and quality values,” he says. “It should be incorporated into procurement rules so that everybody bidding for that contract has to sign up to the very sorts of things Sodexo say they will do voluntarily ... [otherwise] it still leaves the bottom-feeders who will not sign up to something like this and will come in and underbid the more ethical ones. That’s what happens in a competitive market unless it is evenly and fairly regulated.”
A Committee on Standards in Public Life report last year into public services also said commissioners should be clear about what they expect from suppliers to avoid contracts being won on price.
The Social Value Act, Merlin standards for sub-contractors and new Cabinet Office guidance on transparency suggest a direction of travel for further regulation. However the National Audit Office points out that many of the standards expected of public services, such as integrity, do not easily translate into a contract specification.
White argues that best practice should not be contractually or legislatively driven. “Relying on the contract as the answer to problems that we face [would mean] we are in quite a bad place,” she says. “Of course we will deliver against the contract. That is the minimum. But we want to have a different relationship with government around an open dialogue and partnership … our pledge is all about having a commitment beyond the contract.”
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