Communities secretary Eric Pickles' controversial decision to scrap local government's ‘two-tier code' has provided a timely boost to coalition ambitions to diversify service provision, The MJ understands, with Number 10 struggling to deliver a ‘presumption' that private firms and charities should be handed public contracts.

Mr Pickles confirmed on 21 March he would abolish – with immediate effect – the local authority two-tier code, which ensures new employees at firms providing outsourced council contracts receive the same terms and conditions as transferred staff.