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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

Contracting for public servicess

Competition and partnerships

MN4235/MN5035 University of St Andrews

government by contract
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
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
Ways of introducing the discipline of the market place
  • Internal markets
  • (Compulsory) competitive tendering
  • Privatisation

MN4235/MN5035 University of St Andrews

public sector markets
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
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
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
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
The enabling organisation

Advantages and disadvantages of contracting out?

MN4235/MN5035 University of St Andrews

privatisation
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
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
Are partnerships the future?

Competition

Hierarchies

Networks/ partnerships

MN4235/MN5035 University of St Andrews

four basic ways of controlling public management hood

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