The Privatisation of the Property Services Agency: Risk and Vulnerability in Contract-Related Fraud and Corruption

The Property Services Agency was a ‘hived-off’ government organisation responsible for the design, building, renting and maintenance of government property and associated facilities. Its expenditure, and delivery of its functions, were criticised for fraud, waste and inefficiency while it was involved in a number of cases of contract-related fraud and corruption. As the Property Services Agency began to deal with the latter concerns, the government was making it a prime candidate for a purchaser-provider split in relation to funding, the divestment of a number of functions to other agencies and to its client departments, and the introduction of competition in the provision of its services. Finally the Property Services Agency became a candidate for privatisation as its contracting functions were fully transferred to government departments. The responsibilities for combatting corruption and fraud, however, have also been dispersed, leaving HM Treasury to report its concerns over the threat such an area of risk area poses for government departments who have wanted the responsibility for the Agency's functions but, without the awareness, expertise and economies of scale to respond effectively, may be vulnerable to contract-related fraud and corruption. The functions of the Agency, its privatisation, and the implications for dealing with contract-related fraud and corruption provide a case-study in the relationship between different forms of organisation and ownership of the operational and purchasing functions of government, and the ability of governments to control corruption and fraud in public contracting.