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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 l.jpg

Contracting for public servicess

Competition and partnerships

MN4235/MN5035 University of St Andrews


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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


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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


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Ways of introducing the discipline of the market place

  • Internal markets

  • (Compulsory) competitive tendering

  • Privatisation

MN4235/MN5035 University of St Andrews


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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


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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


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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


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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


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The enabling organisation

Advantages and disadvantages of contracting out?

MN4235/MN5035 University of St Andrews


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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


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Other ways of involving the private sector

  • As contractors

  • As funders (PFI)

  • As partners (PPP)

MN4235/MN5035 University of St Andrews


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Are partnerships the future?

Competition

Hierarchies

Networks/ partnerships

MN4235/MN5035 University of St Andrews


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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


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