Understanding the Public Services Industy

Public Services Industry Review
Foreword by Dr. DeAnne Julius
The Right Honourable John Hutton,
Secretary of State,
Department for Business,
Enterprise & Regulatory Reform
I am pleased to deliver my report on the Review of the Public Services Industry which you
asked me to lead. With the support of an Advisory Panel and an in-house secretariat I was
asked to examine the size and contribution of the Public Services Industry (PSI) in the UK,
the lessons we have learned about private and third sector delivery of public services, and
how Government can help the PSI to be more successful both at home and abroad.
It has been a voyage of discovery to define and measure this “new” industry, hidden in a
statistical sense within old categories and budget codes. We have found a large and diverse
collection of big and small, private and third sector enterprises which together produce
nearly 6 per cent of GDP and whose 1.2 million staff are proud to be engaged in delivering
high quality services to the public and best value for money to the taxpayer.
Britain’s Public Services Industry is second in size only to that of the US and is a world
leader in many respects. This is thanks largely to innovative public policy over many years
that has allowed the PSI to extend from basic services such as refuse collection to complex
and bespoke service packages such as welfare to work. These more complex services
require high quality commissioning skills and new partnership approaches. This Review
concludes with 8 recommendations to help government tap the full potential of the PSI in its
drive to provide world class public services for all.
I am grateful to the many organisations and individuals who contributed their ideas to this
Review through the call for evidence, roundtable discussions and interviews. Commissioned
work from Oxford Economics and Professor Paul Grout of the University of Bristol were
of great help in unearthing the data and critiquing the evidence base on the PSI. A huge
thanks is due to the project team in BERR, expertly led by Carol Murray and including Jeff
Barretto, Keith Brook, Nick Forrest, Dan Mawson, Lee Newman and Claire Swadkin. My
discussions with the Advisory Panel, whose members from the private and third sectors,
unions, government departments and academia are listed in annex A, were instrumental in
assessing current issues for the PSI and developing recommendations to address the most
widespread concerns. Those recommendations, and any remaining errors of omission or
commission, remain my responsibility.
I very much hope that the baseline analysis and recommendations developed in this Review
will help government and the PSI embark on a new stage of growth and closer partnership
to deliver their common objective of world class public services.
Yours sincerely
DeAnne Julius