Reading Ian Mulheirn's PF blog about the government’s hesitancy in privatising public services, I began to wonder who is being unrealistic here and whether the government really understands what it is now suggesting when it proposes a bigger role for the voluntary sector.
When David Cameron said back in February that he wanted to open up public services to a range of providers I questioned whether this would take us back to the pitfalls of competitive tendering, and if it didn’t mean that, then what was he getting at?
Ian complains that the government is backtracking, and now only wants services to be provided by the ‘cuddlier’ voluntary sector, and not by the likes of Capita, Serco or G4S. But when I saw this, I still couldn’t understand how the government could deliver what it now apparently wants. After all, it is very difficult to half-privatise a service.
There is the small matter of the EU procurement rules. These would mean that most contracts for services no longer provided in-house would have to be offered on the open market. The only scope for getting a ‘cuddlier’ provider is by offering only very small contracts, or being very ambitious in your social requirements, or by using arms-length companies still owned by the public sector, as in council housing. Or have I missed something?
It would certainly be interesting to see the sorts of partnerships Ian envisages between private suppliers and the voluntary sector, using the latter’s ‘innovation and local knowledge’. The previous government tried to promote such partnerships through its Office of the Third Sector. But there is regrettably little evidence of any progress on this under either government, whether because the big public procurement bodies don’t prioritise the issue when letting contracts or because the private sector isn’t really interested.
Ian has problems about the continued role of professionals, now apparently belatedly recognised by the government. But who but a professional is going to let and supervise the contract? Putting a service out to contract, whoever wins the tender and however cuddly they are, still means supervising them and ensuring value for money. Some criticisms of the public sector seem to imply it can’t even run contracts, but they don’t run themselves.
He’s also worried that none of this will ensure risk transfer to the private sector. But again, how much risk really transfers anyway? The public authority carries the can if services aren’t delivered, and also has to pick up the pieces if the service collapses, as we have seen many times (eg East Coast Trains).
If the government is confused on this issue, and hesitant about unleashing on the public sector generally the sort of reforms it wanted to make in the NHS, it is perhaps not surprising. We will have to await the public service reform white paper to see whether it really understands public procurement and has thought through the changes it intends to make.
If bringing in the private sector is no longer the answer, it might be a good idea to restart the debate by asking ‘what is the question?’ Just what is the problem that ‘reform’ is intended to address?
John Perry writes on housing and migration issues
