Employee Relations in the Public Services: Themes and Issues

By Susan Corby; Geoff White | Go to book overview

7


Tendering and outsourcing

Working in the contract state?

Trevor Colling

Contracting has emerged as a powerful instrument in central government attempts to reform public management. Through the late 1970s, during the Conservative Party’s years in opposition, leading intellectuals and ‘think-tanks’ on the right developed radical critiques of the state and of public services (Graham and Clarke 1986). Derived in varying degrees from the work of Hayek and Friedman, these cohered around a marked preference for market mechanisms over public administration. Benefits, it was said, lay in the superior distribution of information, the opportunity to ‘choose’ between providers, and the accountability ensured by customer sovereignty in competitive markets. A contrasting critique of the welfare state emerged in which service providers were captured easily by pressure groups and vested interests to the point where the needs of ‘customers’ were obscured. With such distorted incentives, public service administrators were incapable of efficient management and tended instead to build ‘empires’ which secured their interests and those of their employees.

Policies developed subsequently in government have ensured that market relations are enshrined throughout the public sector. This chapter focuses upon competitive tendering or market testing, that is, competition among a range of organisations for the opportunity to provide public services. Its impact on organisations and their work forces is assessed and it is argued that contracting provides a vivid illustration of ‘centralised decentralisation’ (Hoggett 1993). Focusing upon the performance and costs of specified services has required greater local decision-making over service levels and delivery mechanisms. A variety of contractual arrangements have emerged, with variation apparent within and between sectors. Local management preferences for direct provision by in-house employees have been marked and sustained. Yet reform has taken place within tightening parameters. Policy choices over competition and private sector provision have been shaped by direct ministerial sponsorship (the civil service) and extremely prescriptive regulations (local government). In the context of intensifying financial restrictions, the shift to contracting has been characterised by quests for cost savings. In contrast to the variety of organisational responses, these common pressures have fostered generally hardened approaches to the management of labour in contracted services.

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Employee Relations in the Public Services: Themes and Issues
Table of contents

Table of contents

  • Title Page iii
  • Contents v
  • List of Figures and Tables vii
  • Part I - Introduction 1
  • 1 - From the New Right to New Labour 3
  • Part II - Context 27
  • 2 - The Economic and Financial Context 29
  • References 51
  • 3 - The Legal Context 53
  • Part III - Issues 71
  • 4 - The Remuneration of Public Servants 73
  • References 92
  • 5 - Equal Opportunities 95
  • 6 - Employment Flexibility 114
  • 7 - Tendering and Outsourcing 136
  • 8 - Quality Management 156
  • Part IV - Players 175
  • 9 - Personnel Managers 177
  • References 195
  • 10 - Trade Unions 199
  • References 221
  • Index 225
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