The contracting conundrum

By John Tizard and David Walker | 09 May 2018
  • David Walker

The dawning realisation that public service contracting has had its day can only grow after 3 May. As new councillors settle in and town halls change political colour, they will further question the shibboleths of the post-1980 era of ‘new public management’ – especially the belief that outsourcing major services out to companies is necessarily cheaper. Some of outsourcing’s staunchest advocates will be swept from power.

The principled case for contracting gets more uncertain. The collapse of Carillion sets the financial risk calculus on its head. Big contractors – notably Serco – are openly saying the business model no longer works. Political pressures also grow. The Labour leaders, Jeremy Corbyn and John MacDonnell, have taken a strong line on private sector participation in public services. Tory-led councils have already been reassessing costs and benefits from contracts.

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