Magazine article Public Finance

You Can't Hold Back the Tide

Magazine article Public Finance

You Can't Hold Back the Tide

Article excerpt

The figures are huge - a million and a half employed, ?45bn of value added and 130% growth over the past dozen years. The public services industry is a great British success. But that does not mean it is any less controversial, as Dave Prentis's article shows ( ? very private party', July 18-24).

What is not in question is that business is here to stay - right at the heart of service delivery and both on the front line and in the back office. I probably would not want to suggest that the ideological battle Is over. I see trade union colleagues often enough to know that some of the King Canute tendency have not given up.

But it is difficult to imagine anything other than the continued development of the private and voluntary sectors' role in service delivery.

As the new director of the CBI's public services team, after eight years leading our work on employment policy, I well remember the scepticism from many in business and politics when we established the team. The government certainly did not welcome us with open arms.

Many in Whitehall expected the relationship between public sector commissioners and private sector suppliers to be based on hostility and suspicion.

Yet, as the CBI has consistently explained - and the argument is finally getting through - keeping contractors at arm's length only ends up making public procurements more expensive and more prone to fail.

If good commissioners know their markets, the best know how to grow the marketplace and keep competition alive through deal flow and dialogue. Sitting down with the private sector and clearly communicating what is required to deliver high-quality services is part of the process.

Doing that properly also means recognising the common concerns and issues that contractors face, regardless of the sectors in which they operate. That is why one of the CBI's consistent aims has been to get the government to take the industry seriously and why we lobbied so hard to get something like DeAnne Julius's report commissioned.

But the report can be only a staging post, not the final destination. The market for public services is changing. Public sector commissioners are seeking greater value for money in tougher economic times. They are also maturing in their understanding of questions of risk transfer and willingness to consider payment by results and more sophisticated delivery methods.

Politicians, too, have recognised that the era of centrally driven targets delivering sustainable improvement is at an end. …

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