Public sector set for shake-up

17 May 01
A leaked document from the Institute for Public Policy Research on the future relationship between public services and private contractors may foreshadow a total reorganisation of health, education and local government provision.

18 May 2001

As Tony Blair took the train to Birmingham to launch the Labour Party manifesto on May 16, the IPPR proposals threatened to overshadow the government's carefully vague scenario for improving public services.

The paper, details of which were published by the Guardian, calls for much greater involvement by the private sector in running public services, and suggests that the scope of private companies' activities should be widened.

It says local authorities should be made to publish an annual 'diversity' statement, showing how much of their budget is spent on in-house contractors, and how much goes on external firms. Under the plan, the Audit Commission would set a diversity target for under-performing authorities if it were thought that poor services were the result of failing to involve the private sector.

The document also recommends a major shake-up in health care provision, with contractors being drafted in to run health authorities and primary care trusts. They should also provide support to GPs – offering services such as payroll, administration and IT support – and should bid for the contracts to replace some 3,000 GPs' surgeries, it says.

The report does not rule out the possibility that an entire hospital, including the accident & emergency and intensive care units, could be run through the Private Finance Initiative, though it says at the moment such a move would not represent value for money.

The foreword to the paper, by Gavin Kelly, says: 'The rebuilding of Britain's infrastructure is one of the major tasks facing the government. Progress to date has been lamentable because of a noxious blend of financial constraints, managerial weakness and organisational timidity.'

Meanwhile Blair launched a Labour manifesto which promises 'fundamental reform' of public services. Pledges in the 44-page document, Ambitions for Britain, include giving more freedom to head teachers, improving standards in secondary schools, and recruiting an extra 10,000 teachers.

It also commits a Labour government to setting up surgical units to tackle waiting lists for operations, and increasing health spending by 6% above inflation for each of the next three years. It promises 20,000 more nurses and 10,000 more doctors, and maximum waiting times cut from six months to three months by the end of 2005.

On combating crime, Labour says it would carry out a sentencing review with the aim of handing out tougher punishments to criminals.

'There should be no barriers, no dogma, no vested interest that stands in the way of delivering the best services for our people,' Blair said.


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