Outsourcers including Capita to create 'living wills' in case they collapse

Contingency plans follow Carillion's demise earlier this year

Outsourcing firms that provide services to the government are drawing up "living wills", which lay out contingency plans should they collapse.

The move comes after the government was caught off guard by the collapse of construction giant Carillion earlier this year.

Capita, Serco and Sopra Steria have volunteered to create protocols in the event that a large government supplier collapses, according to cabinet minister David Lidington.

In a report published on the government website he said: "Carillion was a complex business and when it failed it was left to government to step in - and it did.

"But we did not have the benefit of key organisational information that could have smoothed the management of the liquidation.

"By ensuring contingency plans can be quickly put in place in the very rare event of supplier failure, we will be better prepared to maintain continuity of critical public services."

The government describes a living will as "a plan for how public services provided by a supplier can be secured and continued in the event of a potential company's failure, to allow government time to transfer the services safely to a new supplier, or take them in-house".

Carillion's collapse has brought other larger outsourcing firms into the spotlight, with the likes of BT and Capita struggling over recent times.

Capita came in for further criticism last week after a failure in a system that handled records relating to cancer screening.

The government said the new living wills could be completed within weeks.

Serco CEO Rupert Soames said: "As a major government supplier, which has been quite vocal on issues around government contracting, it's pleasing to see industry and government coming together to develop a shared vision for the delivery of public services.

"We are now beginning to see progress being made in a number of areas - transparency, standards of behaviour, risk allocation, and ‘living wills', which are designed to improve the resilience of government contracting."