Contracts between public and private sectors operate with a ‘trust deficit’

Governments around the world have faced challenges with public procurement due to the COVID-19 crisis, testing their ability and capacity to react quickly and efficiently to deliver life-saving goods and services to the public, asserts a new research report from ACCA (the Association of Chartered Accountants) called 'New Models of Public Procurement: A Tool For Sustainable Recovery'.

Surveying over 1,000 ACCA members and affiliates from both the public and private sector in over 90 countries, ACCA’s research identifies a trust deficit between public sector buyers and private sector suppliers. Only 41 per cent of private sector respondents believe the public sector can be trusted to uphold its side of the deal, compared with 60 per cent of public sector respondents stating they trust their private sector counterparts.

This distrust has been exacerbated by the ‘need for speed’ approach during COVID-19, which has created opportunities for misuse and mismanagement of public sector money. Calling for modernisation of the system, the report also says that to tackle bribery and corruption, audits should be commonplace in all public procurement procedures, beginning as early as possible in the bid process to reduce the likelihood of corruption, while ensuring that the auditors remain independent during the process.

Due to COVID-19 turbulence, a key recommendation in the report is to use public procurement as an opportunity to keep businesses – in particular, SMEs – afloat by publishing contracts early on centralised, open databases that are accessible to all.

Rachel Bleetman, ACCA’s Public Sector Policy and Research Manager, and co-author of the report says: ‘There’s a growing need to ensure that public spending during and beyond the COVID-19 pandemic is not only made more efficient and cost-effective, but that it’s used as an opportunity to tackle some of the biggest challenges of our time - environmental catastrophe, rising social inequalities, ending corruption and meeting the needs for life-saving procurement.’

Alex Metcalfe, ACCA’s Head of Public Sector and report co-author adds: ‘Corruption costs the public sector significant sums of money every year and can create feelings of mistrust towards governments. So the role for finance professionals in helping to make, monitor and evaluate these changes is significant and, as this report demonstrates, the global finance profession is needed now more than ever to help transform how the public sector responds to the crisis.’

Key global findings reveal:

  • Fewer than two per cent of respondents thought minimising contracting cost was the only relevant criteria when evaluating bids.
  • 73 per cent of North America and Europe respondents thought transparency to the public was a key policy objective for public procurement.
  • 36 per cent of private sector respondents thought the quality of public services in their country was good compared with 46 per cent of respondents in the public sector.
  • Globally, ‘bribery and corruption’ was the main challenge in public procurement (62 per cent), but only 23 per cent identified this across North America and Europe. The most common challenge identified in North America and Europe was excessive reliance on a few key suppliers (45 per cent).
  • 57 per cent of respondents in North America and Europe wanted to improve environmental sustainability through public procurement and 58 per cent wanted to see a promotion of ethical practices.

Rachel Bleetman concludes: ‘There’s room for optimism here as the reforms we recommend around eliminating bribery and corruption, competition and the buyer–supplier relationship, modernisation and COVID-19 and the public procurement ‘need for speed’ will all make for stronger public procurement, which is an essential part of public sector spending that, until now, has received relatively little attention. Now’s the time for change, as history has long taught us that, out of crises, new opportunities can emerge.’

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Contact:
Helen Thompson, E: helen.thompson@accaglobal.com
M: +44 (0)7725 498 654
@ACCANews

The report can be downloaded here.

The report is launched at ACCA’s annual Virtual Public Sector Conference on the 4 December 2020 which can be accessed on demand 
https://www.accaglobal.com/ca/en/member/discover/events/uk/2020/12/Virtual-ACCA-Public-Sector-Conference-2020.html

Notes to editors
About ACCA:
ACCA is the Association of Chartered Certified Accountants. We’re a thriving global community of 227,000 members and 544,000 future members based in 176 countries and regions that upholds the highest professional and ethical values.

We believe that accountancy is a cornerstone profession of society that supports both public and private sectors. That’s why we’re committed to the development of a strong global accountancy profession and the many benefits that this brings to society and individuals.

Since 1904 being a force for public good has been embedded in our purpose. And because we’re a not-for-profit organisation, we build a sustainable global profession by re-investing our surplus to deliver member value and develop the profession for the next generation.

Through our world leading ACCA Qualification, we offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. And using our respected research, we lead the profession by answering today’s questions and preparing us for tomorrow.

Find out more about us at accaglobal.com

"There’s a growing need to ensure that public spending during and beyond the COVID-19 pandemic is not only made more efficient and cost-effective, but that it’s used as an opportunity to tackle some of the biggest challenges of our time - environmental catastrophe, rising social inequalities, ending corruption and meeting the needs for life-saving procurement"

Rachel Bleetman, Public Sector Policy and Research Manager - ACCA

"Corruption costs the public sector significant sums of money every year and can create feelings of mistrust towards governments. So the role for finance professionals in helping to make, monitor and evaluate these changes is significant and, as this report demonstrates, the global finance profession is needed now more than ever to help transform how the public sector responds to the crisis"

Alex Metcalfe, Head of Public Sector - ACCA