The accusations of overcharging for the electronic monitoring of criminals by two of the UK’s largest outsourcing companies have revived questions about the risks and benefits of using the private sector to deliver public services. But it would be wrong to use the cases of G4S and Serco, and their contracts with the Ministry of Justice, to condemn the industry, especially before an investigation of the circumstances has concluded.
In 2008 I led a government review to define and assess the UK’s fast-expanding “public services industry”, the name given to the sector that provides facilities to the government and runs, for example, prisons and social care homes on behalf of the state. It revealed a growth sector with more than 1m workers and an expanding volume of exports. Our review of the research also found that, on average, there is a 10-30 per cent saving on the cost of public services, with no apparent decline in the quality of provision. Indeed, in many cases, the quality of service improved. Continue reading »