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Contracting for public servicess. Competition and partnerships. Government by Contract. Three functions: Policy function Buyer function Contractor function Also contracts between policy and provider functions and service users. Key Questions.
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Contracting for public servicess Competition and partnerships MN4235/MN5035 University of St Andrews
Government by Contract Three functions: • Policy function • Buyer function • Contractor function Also contracts between policy and provider functions and service users MN4235/MN5035 University of St Andrews
Key Questions • Should there be competition between contractors to provide services? • Should these contractors be in the private, public or voluntary sectors? • Is the appropriate role for public sector organisations that of the enabling organisation? MN4235/MN5035 University of St Andrews
Ways of introducing the discipline of the market place • Internal markets • (Compulsory) competitive tendering • Privatisation MN4235/MN5035 University of St Andrews
Public sector markets Designed by administrative rules: • Supplier power • Buyer power • Access to markets • Market growth potential • Nature of contracts MN4235/MN5035 University of St Andrews
Executive agencies (Flynn) • Monopoly supplier • Monopsony buyer • Transactions infrequent • Buyer a lot of knowledge about sellers and operation and costs • Block contracts MN4235/MN5035 University of St Andrews
Former NHS internal market example GP budget holders District purchasing agents Private patients Demand for hospital services Supply of hospital services Directly managed hospitals Self-governing hospitals Private hospitals MN4235/MN5035 University of St Andrews
Competitive Tendering - Market testing Long history of contracting in public sector: • Building works • ‘Housekeeping’ services - catering, cleaning • Larger services - eg refuse collection • Core services - finance, personnel, etc MN4235/MN5035 University of St Andrews
The enabling organisation Advantages and disadvantages of contracting out? MN4235/MN5035 University of St Andrews
Privatisation • Done little to enhance competition (Cullis and Jones) • Policy popular due to subsidised shares and tax reductions • Transfer to private monopolies due to successful industry lobbying • Subsequent need for regulation MN4235/MN5035 University of St Andrews
Other ways of involving the private sector • As contractors • As funders (PFI) • As partners (PPP) MN4235/MN5035 University of St Andrews
Are partnerships the future? Competition Hierarchies Networks/ partnerships MN4235/MN5035 University of St Andrews
Contrived randomness Oversight/ Review Mutuality Competition Shift from NW/SE to NE/SW to NE/SE Four basic ways of controlling public management (Hood) MN4235/MN5035 University of St Andrews