Understanding the Public Services Industy

Public Services Industry Review
2.21 Other changes would assist in improving analysis of the PSI and in updating and
extending the work done in this Review. These include:
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• Provision of more detailed COFOG analysis in future PESA publications . This
would allow PSI sectors, such as transport, to be specifically identified and
quantified using the methodology described.
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Maintaining consistent time series for procurement and other key PESA data,
rather than the current practice of revising data for 5 years only.
In so far as possible, reconciling information on procurement obtained by
OGC directly from departments with other published data (e.g. PESA, National
Accounts).
Ensuring that project evaluations are completed on a regular and consistent
basis, either by the commissioners or by organisations such as the NAO, OGC
or 4ps. Although many such evaluations are done, they are not systematically
collated to produce generalised conclusions about service quality, cost savings
and lessons learned.
Building on the important work by National Statistics in measuring service
quality to enable macro level estimates to be made of PSI productivity. This is a
long term ambition, but would be very valuable in spurring PSI growth in those
sectors where it brings greatest benefits.
The Supply Side of the PSI
2.22 There are various ways to categorise the supply side of the PSI market and they
typically differ from the demand side structure. Most of the private sector companies
have both government and private sector clients. For most of the third sector PSI
providers, government contracts are a source of funding alongside more traditional
charitable and foundation support. Many private and third sector organisations operate
in other countries as well as the UK.
2.23 The DCLG/PwC report on developing the local government services market divided
supply side procurement into five sectors: professional services, construction services,
IT services, managed services and products. Oxford Economics’ work for the CBI 16
further categorised supply into facilities management, consulting and HR activities.
Private and third sector organisations are also described, represented and analysed by
a range of industry associations and market research firms.
2.24 For the purpose of this Review, the following six sectors have been considered
although in many cases there is a some overlap between them:
15 HMT has suggested that future PESA publications should include two digit COFOG analysis.
16 The size of the market for providing public services in the UK, Oxford Economics (Commissioned by CBI) (2008).
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