Call to open up UK public services

There is “a clear case” for the private and voluntary sectors to take a bigger role in providing public services, says DeAnne Julius, the economist.

She delivered a review on Thursday to the government on the public services industry. Her report shows that the independent sector is already providing a third of public services – a larger share than previously thought – with the business having doubled in real terms in a decade and now worth almost £80bn a year.

“A lot is happening in this market, but things are not happening fast enough,” she said. The review judges the UK to be a world leader in outsourced public services. But Ms Julius, a former chief economist at British Airways, adviser to the World Bank, and a former member of the Bank of England’s monetary policy committee, noted that in Australia the proportion had already reached 40 per cent.

Departments and councils needed to develop pipelines of tendering opportunities with timescales attached and monitored, she said, to signal “a long-term commitment to open up public service markets and maintain effective competition”.

The Treasury needed to tackle a series of value added tax and other issues that prevented the public, private and voluntary sectors from competing on equal terms.

Brendan Barber, Trades Union Congress general secretary, said the report missed the point. “Much of what the public services do needs to be motivated by the desire to serve the public, not to make profits for shareholders. Yet the public service ethos is simply dismissed in this report.”

John Hutton, the business secretary who commissioned the report, said the private and voluntary sectors were “helping maximise taxpayer investment and improve quality”.

source:- ft.com/cms/