Understanding the Public Services Industy

Public Services Industry Review
- Commisioners should ensure that this guidance is followed and also that:
- pre-qualification and bid criteria do not unnecesarilly restrict SMEs or third
sector enterprises;
- information on current service levels and costs is provided to all potential bidders
to avoid favouring incumbants; and
- the costs of transition from incumbent to a new provider are clearly considered
when comparing bids.
Recommendation 4: Partnerships
Partnership approaches between contractor and provider should be encouraged, especially
in the post-contract monitoring stage when both parties have the common objective of
delivering better public services.
Recommendation 5: Commissioning Skills
A Director of Service Delivery should be appointed for all departments and local authorities
with a substantial service delivery function. This post should be at a very senior level with
accountability for the delivery of public services, whether purchased from the PSI or kept
in-house. Their involvement would extend through the full commissioning cycle – not just
the initial procurement - and they would be the high level client interface when problems
with service delivery arose. They would also ensure that their procurement and contract
monitoring staff receive adequate training, supported by OGC and DCLG to accelerate
‘learning by doing’ and sharing of experience.
- For the government departments most involved with service delivery this post should
be at management board level.
- For large local authorities this post should be at executive director level.
Recommendation 6: Bid Costs
Bid costs incurred by all parties should be reduced by agreeing clear and consistent
objectives, simplifying bid documentation, reducing uncertainty around timing and engaging
in earlier and more open communication about desired outcomes and risk allocation.
- Bidding timetables should always be published with the tender documents and actual
timetables should be monitored by OGC and DCLG. ‘League tables’ of departmental
and local authority performance against their plans should be published annually.
- OGC should monitor the procurement timescales under Competitive Dialogue over the
next three years and take particular note of complaints to its Supplier Feedback Service
from the PSI about intellectual property issues.
How can the government help the UK PSI to be successful in overseas markets?
The PSI is becoming a global industry. Many international firms already operate in the
PSI in the UK and they report few barriers to entry. Service provision models that are
proven to work in one country are transferred to others. Rising per capita incomes in the
emerging economies are driving an expansion in their demand for services such as health,
iv