Vodafone allows government savings to be made public
- 26 March 2012
- From the section UK Politics
The telecommunications company Vodafone is the only major government supplier which has agreed to the release of data about how much Whitehall has saved through renegotiation of contracts.
For the last financial year, the government and Vodafone agreed that the state could save £5.3m on its payments to the mobile phone company.
This was one of a number of renegotiations with large suppliers pursued by the coalition after it came to power.
In October 2010 the Cabinet Office Minister Francis Maude told the Conservative party conference that the new government had saved "several hundred million pounds" in one year by modifying contracts with its biggest suppliers.
He said this was based on "dealing with them as a single customer instead of letting them play one part of government off against another".
But the Cabinet Office refused to provide a breakdown of this figure by supplier, in response to a freedom of information request from the BBC.
It did provide a departmental breakdown, which showed that the Ministry of Defence and the Department for Work and Pensions accounted for over half the total of the overall government savings target of £671m.
The Cabinet Office argued that releasing company-by-company details of savings would damage relationships with suppliers and jeopardise negotiations with them.
The BBC appealed to the Information Commissioner, who last month upheld the government's refusal, except where suppliers themselves consented to the release of the figures.
The only company to agree was Vodafone.
"We believe in being as transparent as possible in our dealings with the Government," said a Vodafone UK spokesperson.
The company denies that the savings agreed indicate that government departments were previously being overcharged.
"Our dealings with central government are now far more about helping government find a better way of working," the spokesperson said.
"We strongly believe that using our technology and expertise will save many hundreds of millions of pounds in areas such as property, energy and fixed-line communications. We are prepared to make an investment in providing services to the public sector to help the government secure the much bigger gains that can be made by working smarter."
Vodafone's financial relations with government have recently been highly controversial because of the company's tax affairs - and the sums involved in this dispute are much greater than the £5m savings - but in the context of these contract renegotiations, Vodafone has been more willing to be transparent than any other large Whitehall supplier.
It illustrates how private companies that do business with the state will increasingly have to face up to questions of openness and freedom of information.
The willingness of public sector suppliers to accept greater scrutiny of their contracts is going to grow in importance as an issue, in line with the pressure for transparency in value for money in public spending.
UPDATE 11:53 BST
The Cabinet Office has got in touch to say that since the Information Commissioner's decision, another government supplier has agreed to the release of details of savings - the IT services group Capgemini. In its case, the savings agreed through contract renegotiation total more than £200m, although this figure is over several years until 2017.
The savings agreed with another supplier are expected to be announced later this week. This new policy of disclosing such savings represents a change in approach from the Cabinet Office since the commissioner's ruling.
The Cabinet Office argued that the BBC's FOI request should be rejected even when the companies themselves were happy for the information to be released, because by a process of elimination it could lead to other companies who were not so willing being identified. Now the government does seem keen to publicise some of the company-by-company savings it has agreed.