Releasing the grip of state control?

Following my post yesterday on David Cameron’s new compulsory competitive tendering proposals, our guest blogger Monimbo, who also lived through the CCT regime of the 1980s and 1990s, penned these reflections.

Given this government’s restless urge to upend public services, arguing that the ‘grip of state control’ needs to be lessened still further was always likely to lead to more contracting out and privatisation.  Of course, as David Cameron does in the Daily Telegraph of 20 February, this can always be presented as moving away from top-down targets, encouraging diversity, delivering at the lowest possible level and, once again, providing opportunities for the voluntary sector. 

Yet it is pretty clear that the reality of his promised white paper on public service reform will be something remarkably similar to compulsory competitive tendering.  CCT is of course the discredited policy from the 1980s, whose only enduring effect has been to privatise a large swathe of low-paid jobs, such as the very bin collection contracts which on other occasions exercise the mind of the Secretary of State for the Environment.

Cameron now claims that, by reviving CCT:

‘…power will be placed in people’s hands. Professionals will see their discretion restored. There will be more freedom, more choice and more local control.’

To which one can only ask, was he around at the time when this was done before?  Does he really believe that contracting out created more diversity of providers, and more choice?  As far as I recall, the outcome was either that, after an expensive and time-consuming process, the in-house teams won – or, in a few cases, that a big provider like Serco or Capita won instead.  Whatever the virtues of a Serco or a Capita, do they really meet up to the starry-eyed descriptions of services brought closer to the people that Cameron enunciates in the Telegraph?

There are three fundamentals of contracting out of which he seems unaware.  First, there needs to be a contract. As those involved in Housing PFI contracts know only too well, a service specified in mind-boggling detail in a contract is not a flexible service.  Yet miss out the detail and what you will get is not a flexible service but a poor one.  Once contracts are signed, the only flexibility they give is whatever terms can be varied that are already in the contract, at whatever price is specified.  Anything beyond this is likely to be prohibitively expensive.

Second, contracts need to comply with EU procurement rules if they are above the minimum size.  These rules are strict.  The opportunities for including ‘social clauses’ exist, but they are carefully policed by lawyers.  Does Cameron’s view of ‘diversity’ include international firms operating British public services? It may well do, but it’s probably not what his Telegraph readers have in mind.

And finally, of course, this does not reduce bureaucracy, it increases it.  Cameron talks about ‘bureaucracy over-ruling common sense, targets and regulations over-ruling professional discretion.’  As CCT showed, you need more staff to run a service because to administer a complex contract you need a ‘client side’ to ensure that the contractor is doing their job.  Can those on the client side dispense with bureaucracy, targets and regulations? No, they are the essence of any contract. Do they largely have to give up exercising their professional discretion? Yes, because using discretion will cost money that will no longer be available.

Cameron’s vision for public services isn’t a new one.  It’s a recycled policy from the 1980s that didn’t work then and won’t work now.  It may, however, succeed in what many will think is its covert aim: to get people so disenchanted with public services that they opt out, vote for tax cuts and lose all sympathy with public servants.  Taken together with the effects of the spending cuts, that really does look like an objective that he might achieve.

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One Response to Releasing the grip of state control?

  1. Robert says:

    But it’s also labour councils that sold out to these private companies, my area has a private company that collects the refuse from shops and companies, it has actually shot up with less private firms wanting to do this.

    But in the end it was labour choice on employment as they said in the 1997 manifesto we will help more small firms into life, what they did was market the public sector not the private small firms.

    Tories are just helping them selves to the mess left by New labour

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