Public sector accountability and commercial-in-confidence outsourcing contracts

Purpose – The purpose of this paper is to examine the concept, need and requirements for accountability in the public sector, and how the use of outsourcing activities on a commercial-in-confidence basis negates the accountability requirement and can lead to inefficiency. This thereby negates the major benefit claimed for outsourcing. Design/methodology/approach – The paper adopts a normative approach based on political science and economic theory to analyse the concept of accountability and its ramifications. It uses the redevelopment of a public football stadium as a case study to illustrate the consequences of commercial-in-confidence outsourcing. Findings – The postulated consequences are confirmed by the case study. Research limitations/implications – Information about potential problems generally becomes available only after the event when it is too late to correct the problems. However the analysis and empirical evidence have important implications for policy making to curtail the practice. Originality/value – The paper highlights the importance of freely available information concerning public sector operations to help ensure efficiency in resource use. It is the public sector counterpart to Adam Smith’s “invisible hand” which brings about efficiency in private sector markets.