Last week, Sir Merrick Cockell, the head of the Local Government Association, made some interesting comments about how the government provides public services. In an interview with the FT, he warned ministers not to assume that the private sector was necessarily best.
He said there had been a period when “public bad, private good” had “almost been a mantra”, accompanied by a belief that “the right way for local authorities to do things was to outsource everything”.
I hope we’ve moved beyond that, because there are very good cases for outsourcing. There are even stronger cases for testing a service properly to see whether it’s the right service to outsource, to see whether there’s a mature market out there that may be suitable to tender against it and then properly to reach a conclusion that there is, or there isn’t.
An additional 3,000 civilians will be axed from the Ministry of Defence after ministers realised the department’s “black hole” – the gap between revenue expectations and spending commitments – was bigger than previously thought.
This “black hole” has become one of the government’s most effective examples of Labour profligacy versus coalition (especially Conservative) fiscal discipline. But in truth, we’ve never really known how big it is or how close it is to being eliminated.
It is generally reckoned that when the coalition came in, there was a £10bn gap that needed closing over the course of the parliament, but the total overspend on existing projects could eventually be as high as £38bn. Read more
There is something curious in the way that several key transport decisions were left out of the CSR on Wednesday. The four missing announcements were: the big order for Intercity Express trains from the Hitachi-led Agility consortium, the electrification of the Great Western line, another order for about a thousand train carriages and the Thameslink upgrade.
Sources in the Department for Transport insist that these interconnected upgrades are genuinely going to the wire. They depend, for example, on Agility’s ability to reduce its original £7.5bn cost by a significant margin. Read more
I revealed last month that there were growing concerns within the rail industry that the £7.5bn order for new Hitachi trains to replace the ageing Inter-City fleet could be put on hold or cancelled.
Andrew Foster, former head of the Audit Commission, was asked in February (by Lord Adonis) to examine the case for the contract. Read more