Watchdog report raises concerns that the MoJ could be among the most vulnerable to outsourcers that are ‘too big to fail’.

The Ministry of Justice's dependence on controversial outsourcing giants is under the spotlight today, following a National Audit Office report on the role of major contractors in government.

In 2012/2013 the department spent £647m on G4S, Serco, Atos and Capita. This was the second largest spend in central government, behind the Ministry of Defence.

The audit report expresses concern about the government's dependency on private providers of public services. ‘There is a sense that some may be “too big to fail” – and difficult to live with or without,’ it says.

Overall the MoJ spent one-third of its £8.4bn annual budget on private suppliers, one of the largest proportions in central government.

The report highlights the MoJ’s claims of overbilling under its electronic monitoring contracts with G4S and Serco. The Serious Fraud Office has since launched an investigation into the companies over claims they have overcharged the department tens of millions of pounds. 

It also cites the MoJ’s translation and interpreting contract with Capita, the difficulties of which were first exposed in the Gazette, following the company’s acquisition of specialist contractor Applied Language Solutions in December 2011.

Amyas Morse, the NAOs head, said a crisis of confidence is emerging ‘caused by some worrying examples of contractors not appearing to treat the public sector fairly, and of departments themselves not being on top of things’.

The report calls for better public scrutiny across government contracting: ‘There have been several high-profile allegations of poor performance, irregularities and misreporting over the past few months. These raise concerns about whether all contractors know what is going on in their business and are behaving appropriately; and how well the government manages contracts.’

It adds: ‘The government believes that contractors generally have often not provided sufficient value, and can contribute more to the overall austerity programme.’

Total central government spending with the four suppliers was £2.994bn in 2012-2013. The four companies were chosen to illustrate ‘cross-cutting issues', the report says.