Understanding the Public Services Industy

Public Services Industry Review
6.21 Such a slowdown is not inevitable, nor does it appear optimal during a period of
strong consumer demand for better services and tightening fiscal constraints on
government spending. Comparisons of the share of PSI provision across different
countries and sectors shows significant scope for expansion. But at the same time
providers are finding that bid costs are increasing and the procurement process is
being used to target objectives for which it was not designed and is not necessarily
best placed to achieve. This will only add to the cost and complexity of the process. It
will particularly disadvantage SMEs and third sector providers, and may drive more
large providers to look for greener grass in offshore or private sector pastures.
6.22 More than any other major industry, the future of the PSI is in the hands of
government; conversely, the PSI can also do more to directly affect the achievement of
core government objectives than any other industry. Despite its size and importance,
the PSI has received little focussed attention and its relatively few failures are better
reported than its many successes. This Review has attempted to provide some
definitive answers to questions about the size and effectiveness of the Public Services
Industry in the UK. It has also sought evidence on the factors that have helped and
hindered its development, as well as those areas where policy change could make it
more effective in the future.
6.23 Further work will be necessary to develop specific plans to address the general
recommendations provided. There is a clear case for action to reverse recent
trends and create the conditions for the growth of a diverse and successful Public
Services Industry and, thereby, to spur the drive towards world-class, personalised
public services for all. Government also needs to effectively communicate why and
how it intends to achieve this to professionals involved in the PSI – be they in the
public, private or third sectors – so that they feel engaged in the process and able to
contribute their ideas and know-how.
Recommendation 8: Next steps
Government needs a co-ordinated plan of action to take the recommendations of this
Review forward and ensure that progress is made. Equally the PSI needs to make the
best use of the opportunities available to it for further engagement.
- The Advisory Panel for this Review – which includes government, unions, private
and third sector organisations - should be retained in some form, meeting
regularly to review progress, provide feedback to the government’s response and
identify new issues as they arise.
- The private and third sectors should make more use of feedback mechanisms
already open to them; both directly to public sector clients and indirectly though
the OGC.
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