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This course explores the dynamics of contracting for public services, emphasizing competition and partnerships in the private, public, and voluntary sectors. It delves into the policy, buyer, and contractor functions, analyzing the roles of public sector organizations and executive agencies. Key questions revolve around competition among contractors, sector preferences, and the role of enabling organizations. Privatization, market testing, and alternative means of private sector involvement like funding and partnerships are discussed. Emphasis is placed on ensuring effective regulation and exploring the future potential of partnerships in public service provision.
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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