Public sector accountability and commercial‐in‐confidence outsourcing contracts

Abstract

Purpose -The purpose of this paper is to examine the concept, need and requirements for accountability in the public sector, and how the use of outsourcing activities on a commercial-in-confidence basis negates the accountability requirement and can lead to inefficiency. This thereby negates the major benefit claimed for outsourcing. Design/methodology/approach -The paper adopts a normative approach based on political science and economic theory to analyse the concept of accountability and its ramifications. It uses the redevelopment of a public football stadium as a case study to illustrate the consequences of commercial-in-confidence outsourcing. Findings -The postulated consequences are confirmed by the case study. Research limitations/implications -Information about potential problems generally becomes available only after the event when it is too late to correct the problems. However the analysis and empirical evidence have important implications for policy making to curtail the practice. Originality/value -The paper highlights the importance of freely available information concerning public sector operations to help ensure efficiency in resource use. It is the public sector counterpart to Adam Smith's "invisible hand" which brings about efficiency in private sector markets.

Performance Reporting by Australian Government Trading Enterprises: an Empirical Study 1998–2002

“…More interestingly, it permits the exclusion of relevant information from reporting if the GTE directors believe that such information is "commercially sensitive" and the reporting of the information would result in "unreasonable commercial prejudice" to the GTE. This provision highlights that public accountability may be compromised by commercial confidentialitya situation that has been widely criticised by various researchers (Guthrie 1993, Parker and Gould 1999, Barrett 2001, Barton 2002.…”

Does Accountability Discharged through Performance Measurement System?

“…Accountability, define by Robert and Scapens (1985) and Parker and Gould (1999) quoted by Othman et al (2006) as the giving and demanding of reasons for conducting in assurance that a certain task is performed in a responsible manner and the individuals or organisations answerable for their action and performance. Barton (2006) agrees that accountability involves an obligation by agent to answer to principal by providing information, either by written report or verbal communication. In the context of government, he further argues that accountability arises from the nature and role of governments in democratic nation that requires it to make wise decisions, due to the fact that citizen pays taxes, reflects the relationship between principal and agent.…”

The East West Link PPP Project's Failure to Launch: When One Crash‐Through Approach is Not Enough*

“…These follow‐the‐money powers can help alleviate longstanding concerns about the accountability and governance arrangements of Australia's PPPs (Barton ; Gendron et al. ; Mulgan ; Public Accounts and Estimates Committee (PAEC) ; Sands ).…”

“…These follow-the-money powers can help alleviate longstanding concerns about the accountability and governance arrangements of Australia's PPPs (Barton 2006;Gendron et al 2001;Mulgan 2006;Public Accounts and Estimates Committee (PAEC) 2000;Sands 2006). In some quarters, the operationalisa-tion of these arrangements through long-term, inter-governmental PPP contracts is considered to have created 'an illegitimate child of the historical partnership family' (Hodge 2006: 46).…”