Understanding the Public Services Industy

Public Services Industry Review
Figure 2.1: PSI as a percentage of GDP (selected OECD countries)
Sweden (2006)
Australia (2006)
UK (2007/08)
USA (2005)
France (2005)
Spain (2006)
Source: Oxford Economics
0% 1% 2% 3% 4% 5% 6% 7%
%GDP
2.5 The UK position as a global leader in opening up public service markets to competition
has also been highlighted by comments from stakeholders submitted to the Review’s
call for evidence:
‘Unquestionably, the UK public services market is the most advanced in the world,
taking into account the number of sectors where independent providers are involved,
the range of functions included within the scope of such contracts, the extent of risk
transfer, and the sophistication of the procurement and contract management models
involved’ (Serco)
‘…on the whole public sector IT services markets outside the UK are less mature in
their supplier relationships with the private and third sectors’ (BT)
‘in broad terms the UK leads the world in the development of a PSI in which the private
sector can participate. The UK has applied Compulsory Competitive Tendering, PFI and
PPP models more fully than any other country for delivery of public services. While
other countries are starting to recognize the benefits of private sector involvement
in the provision of public services this has rarely developed into the availability and
service level contracting witnessed in the UK’ (VT Group)
How big is the PSI in the UK and how fast has it grown?
2.6 In 2007/08 the turnover of the PSI (across central and local government) in the UK was
£79bn, an increase of 126 per cent from £31bn in 1995/96. Figure 2.2 shows how this
figure is derived and Box 2.1 provides a summary of the methodology used.
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