Understanding the Public Services Industy

Public Services Industry Review
The 10 key questions are as follows with a summary of responses:
Q1. Does the government engage with private and third sectors to the optimal extent
at present? Where is there scope for increased involvement and where is service
provision best done in house?
Respondents typically thought that government does not engage or collaborate with
private and third sectors sufficiently. It was felt that greater consultation and dialogue by
government commissioners at an early stage would greatly assist a better understanding of
what was required and how best to achieve it. Such engagement should also be tailored for
central, local and community situations and would benefit from greater cross-department
involvement.
Some respondents believed the government could achieve multiple benefits such as
lowering costs and improving service delivery through improved engagement with
suppliers. There was a broad consensus that a mixed model of public, private and third
sector was appropriate, where provision decisions are based upon value for money,
capability and risk characteristics. There were suggestions for increased involvement of
private and third sector organisations in the provision of education services (outside BSF),
offender management, employment, health and social care. Few areas of public services
activity were perceived as inherently public, such as leadership, policy and procurement
strategy generally and within health secure mental health, 999 and A&E. Rather than
attempting to define a permanent boundary, respondents suggested that government
should have an ongoing and outcome oriented appraisal approach to determine which
activities to open to PSI involvement. A minority of respondents considered that the majority
of public service delivery should remain in-house.
Q2. What current government policies and practices have been most effective – and
therefore should be continued or expanded – in increasing the role of the private and
third sectors in the PSI?
Responses to this question were diverse. There were a number of specific examples
provided by the respondents, where government’s policies and practices have been most
effective. Government reports and reviews have challenged current approaches and set
targets for improvement. The establishment of the OGC and more recently Office of the
Third Sector have helped to establish better links between stakeholders and promulgate
best practice. The creation of a Commercial Directors in a number of departments has also
helped to bring an open approach to partnership and risk and reward sharing.
Further practices that respondents consider to have helped include consultation and
competitive dialogue (although in the case of the latter, responses also noted the additional
time costs involved). Examples of good practice included DWP’s welfare to work programme
and HMT’s Financial Skills Advisory Panel. On the topic of skills examples were provided
where it was beneficial to involve operational experts in the market design.
Commissioning strategies were seen as helpful, especially where they consider the
outcomes required from public services, the capacity of the provider base, and where they
signal the extent of the pipeline of opportunities available. In terms of contract innovation,
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