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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) New Models of Public Procurement: A Tool For Sustainable Recovery.

Surveying finance professionals from both the public and private sector in over 90 markets including South Asia, ACCA’s research identifies a trust deficit between public sector buyers and private sector suppliers. Globally, only 41 percent of private-sector respondents believe the public sector can be trusted to uphold its side of the deal, compared with 60 percent of public sector respondents stating they trust their private sector counterparts.

According to the 136 respondents across South Asia, including Pakistan, the top three challenges faced are bribery and corruption (81 percent); underdeveloped e-Procurement systems (45 percent) and poor payment practices by the government (41 percent). Findings also reveal that just 22 percent of South Asia respondents said the quality of public services was good, compared with 77 percent in the Middle East and 65 percent of respondents in North America and Europe.

When asked about policy objectives for evaluating public procurement, fair dealing with all bidders and suppliers was viewed as important (63 percent), followed by transparency to the public (62 percent) and promoting ethical practices (57 percent).

Sajjeed Aslam, head of ACCA Pakistan, says: ‘Our report calls for procurement modernisation, with audits 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, another key recommendation 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 said: ‘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.’

Rachel Bleetman concludes: ‘Across South Asia and on the global stage, 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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