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Private Sector "Unholy Trinity" - Kemp, 7/02/08

Article by Cllr Richard Kemp, Liberal Democrat Group Leader - February 2008

On January 3^rd I was sitting wondering whether I would be able to get to London on the West Coast Main Line which was already 4 days late in reopening after Christmas. I was reading all about my money (and yours) being mopped up by Northern Rock, and reading a report about Metronet which subsequently has hoovered up another £2 billion of our cash.

The thought occurred to me then as it has done before or since – “why do we place so much trust in the private sector?” All three major parties are in thrall to the unholy trinity of private sector money, private sector people and private sector companies providing our services. We have reached the point where to be critical of the private sector is a heresy condemning you for ever to the outer darkness of extremism and communism. For that reason it seems to me that too many councils are taking the easy route for service delivery and outsourcing services rather than taking the hard decisions of doing them in house.

Don’t get me wrong there are some very good parts of the private sector that perform well for the public sector. There are some areas of work like IT where it is unlikely that even the largest council can keep up to date with changes and where a link up with a much bigger body will be of great financial and service value. But the private sector as we can see from the examples quoted above is not infallible and above all it lacks what I think is the most prized requirement for public sector staff – the public sector ethos which makes people commit their lives to the service of others through their work.

So what could we do?

Council Leaders and Chief Executives must look more critically at their private sector partners. When contracts come up for renewal I think that councils should almost always consider an in house bid - not least to keep complacent private companies on their toes.

We should be far more open about councils doing work for other Councils. As an example South Lakeland Council has an excellent contract for delivery of licensing services with Lancaster City Council. If councils do not have the critical mass for service delivery by themselves they should link up through contracts or MAAs.

The Government needs to make this simpler. Arcane rules on public sector borrowing mean it is easier for a private company to raise money to buy equipment for the same public sector work than the private sector. With very simple changes in Treasury rules they could create a level playing field.

Lastly, we need to end the myth that there are only two sectors – public or private. Most of the public sector still sees social enterprises as sandals and brown rice outfits! Despite much effort by the Government the spend through social enterprises is derisory. In most of them, be they housing associations or service providers or facility providers, the bridge between public sector ethos and private sector capacity and methods has been bridged. They can deliver and do so sometimes with both arms tied behind their back!

Procurement is not a science – it is an art. It is typically an area left to ‘experts’ where the politicians rarely venture but where political input into strategy and direction could have major input into getting better value for money. I am not asking anyway to condemn the private sector but by removing our blinkers and putting third and public sector options onto a level footing we could save a fortune and provide better services.