Contracting and Partnering for Public Services

This chapter explores the meaning of contracting for services, why it has been increasing, what are its pros and cons, how it is linked to competition and partnership working and how it could be used for the wider socio-economic goals (public value) of government. It argues that competitive contracting under NPM has resulted in some transfer of service provision from the public to the private sector, although the overall effect is still limited. Where services are delivered by the private sector, there is some evidence of savings and improved quality, but these must be weighed against higher transaction costs, incidences of contractor failure and inequality effects on public sector employees. While there is often recognition of the necessity of using private sector expertise and finance, governments also seem to recognize the distinctive contribution that public sector employees can make, except where they are felt to be resistant, or where the services they provide are deemed to have failed. Increasingly, the solution is being found in a mixed economy of public, private and voluntary provision and through PPPs.