More competition in public services could save £23 billion says new research
New research commissioned by the CBI claims that the public purse can save £23 billion by increasing outsourcing without harming quality.
According to the report, opening up public services to independent providers would improve productivity and deliver savings of 11%. The figure is arrived from extrapolating savings of £2 billion Oxford Economics identified after analysing a sample of 20 services.
"Most public services are still state monopolised and it's time to open some of the to competition," said the CBI director general, John Cridland on the launch of the Open Access report produced by Oxford Economics. “That is the way to maintain quality and achieve billions of pounds' worth of savings.”
The research shows 98% of the management of social housing and 86% of prison management were being provided by the public sector. Cridland highlighted school dinners as an example of where competition would be appropriate.
The CBI Director General argued that demand for public services are rising fast from an increasingly ageing population in the UK and the status quo approach to public service delivery will not be adequate.
“Carrying on regardless would be a recipe for disaster,” he warned.
"We need the Government to set out which services it is prepared to open up to independent competition and when,” he added. “Businesses recognised that there are justified concerns following recent high-profile failings and that they have to work hard to maintain public trust by consistently delivering high quality services."
The Coalition government reiterated its commitment to bringing innovation and improvement to public service delivery through a statement but the unions were not so impressed.
Dave Prentice, General Secretary of Unison, thought the report was “fundamentally flawed” and that numbers were “plucked from thin air”. He pointed out that only last week the Home Affairs Select Committee had to recommend blacklisting G4S for its failure to deliver security services at London 2012.