The public sector has been an inhospitable environment for many jobbing PAYE umbrella contractors under the Government’s austerity regime; however, things are about to get a lot tougher for the bigger beasts in the contractor market, as Cabinet Minister Francis Maude announces stringent new performance criteria designed to dispense with poorly performing primary suppliers.

The industry news source Shout 99 reports that Mr Maude intends to press ahead with proposals to make contracts in the public sector more flexible; those who fail to deliver or who a have accrued blots in their copybooks will be shown the door and politely asked not to return. The initiative does not appear to be related to the Government’s crackdown on the use of public service companies in the public sector, although it does coincide.

In a comment to The Independent newspaper, Mr Maude remarked: “This government will not tolerate poor performance, and this is one of the areas that the next phase will look at. All contracts will have performance criteria written into them.”

£800 million has been saved since the Government’s primary contractors were invited two years ago to reduce their costs, with a thumping £70 million coming from just two sources (software leviathans Microsoft and SAP). Now, primary suppliers will be asked for their feedback on the tough new performance criteria.

Mr Maude may need to tread with caution: if contractors begin to feel that they are being unfairly targeted, they could chose to walk away from the public sector altogether. As we reported last week, this could leave government departments bereft of desperately needed interim management contractors – an own goal rather than an efficiency triumph.

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