Contracting Out

by David Walker

Published 1 May 2014
Contracting out is at a watershed. Crisis has engulfed Serco and G4S. Their failings have pushed even this pro-market government to demand intrusive reviews of their costs, operations and governance. Poor performance by contractors is alleged in prisoner escort, asylum accommodation, electronic tagging and health. And yet contracting out has cut costs; it has brought innovative ways of working into council and civil service clerical operations. Enthusiasm for contracting out has now cooled, even among Tory ministers most wedded to private provision but by 2010 contracting out accounted for around half of the GBP187bn that the public sector spent on goods and services each year and the public sector owed companies some GBP206bn under the banner of the private finance initiative (in England). What started all this, and why? Why were successive governments so attracted by a kind of self-evisceration of the public sector? And why in certain sectors does contracting remain the norm? Contracting is huge and controversial yet under written.
Few books have pulled together the evidence or - as here - linked practical experience to the (economic) theory and management doctrine standing behind it. This book looks at the history of government contracting out, at the facts about its practice, at economic and organisational theory; the balance of public and private interests; the contrast between dogma and pragmatism in public services. Just what is the future for this phenomenon that touches all of our lives?