THE government’s obsession with cost when outsourcing public services is undermining quality and encouraging private companies to take dangerous risks, a damning report published today reveals.

MPs on the Commons public administration & constitutional affairs committee found that “there has been a depressing inability of central government to learn from repeated mistakes” when contracting out services, which contributed to the collapse of Carillion earlier this year.

Their report found that “the failure of Carillion reflects long-term failures of government understanding about the design, letting and management of contracts and outsourcing,” and that the debacle “reinforced a widespread crisis of confidence in government reliance on the private sector.”