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Jacqui McKinlay: Scrutiny can rebuild trust in commercial partners

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Scrutiny of commercial structures and partners is now commonplace in councils. But while most companies engage well and the quality of scrutiny is good, there is more that needs to be done.

We come across too many examples of companies that resist or are reluctant when requested to appear before a scrutiny committee. Notwithstanding commercial confidentiality, scrutiny is vital.

Companies contracting with a democratic body and spending public money should automatically accept the need for scrutiny, transparency and oversight. If public trust and confidence are to be maintained, scrutiny must be a key feature.

Scrutiny functions are also getting involved too late. Coming in at the tailend when the contract is in place negates the benefits of independent oversight and can cast a shadow, as members lack understanding or ownership of the arrangement.

We also need to consider whether traditional scrutiny methods are right for this environment. There is nothing worse than attracting a private sector partner to a committee only to miss the chance to ask the right questions.

Private sector companies are recognising the value and need for improved ethical standards and public scrutiny. Showing commitment to sound business ethics is a critical component of corporate trust.

Last year seemed to catch out a few companies, some accused of not being upfront about problems, or exposed as operating unethically. This has led to concern or doubt in similar businesses.

Consequently, public-private sector relationships are under more scrutiny. Companies with public sector interests will undoubtably have found that they need to work a little harder. Trust and confidence once assumed must now be more rigorously shown.

Most companies operate ethically, want to do a good job, and recognise their wider social impact. Organisations are increasingly committed to going much further in their relationships with others and society to use their influence, resources, capacity and capability to improve people’s lives and places.

We’ve been working with several private sector companies, including the contractor Skanska UK and the utility firm ENGIE, who have been keen to learn from councils how to approach scrutiny from an internal and external perspective. Both have been able to apply learning in relation to culture, behaviours, training and structures to their own performance. They are seeing results.

We’ve also been looking at how we can match a council’s need for greater trust and reassurance alongside the private sector’s desire to be more visible about its corporate credentials. For the private sector this conversation is often in the context of corporate social responsibility and where to go next in pursuit of higher business standards.

The best corporate social responsibility plans set out a clear vision and measurable commitments. The best of the best show they are prepared to be held to account and be more transparent on progress.

But is this enough for councils? Does applying structures such as scrutiny boards to test and hold to account firms’ own performance give enough assurance and confidence?

This debate is one that all parties need to be involved in. Sharing learning will shape the future of public-private partnerships and boost the chance of regaining trust and confidence.

Jacqui McKinlay, chief executive, The Centre for Public Scrutiny

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