Public Sector Outsourcing: Governmentality or the loss of power and control? - Colin Haslam, Professor of Accounting and Finance at Queen Mary

Over the last two decades British central and local government authorities have pursued a revolutionary strategy that has progressively outsourced the provision of public services to the private sector. This transfer of public resources to the private sector is founded upon a simple good-bad typology. Supposedly, the public sector is inefficient because it lacks incentives and a profit motive, whereas because profit-driven private firms compete in competitive markets inefficiency is driven out and value for money delivered.  

In recent years outsourcing contracts with the private sector have increased as a share of total government external procurement from 34% to roughly 60% (see figure 1). The outsourcing relationship between central and local government agencies and private sector counterparties is mediated through the ‘outsourcing contract’. These contracts represent a form of decentralised, capillary power capable of reinforcing ‘governmentality’, a term coined by Michel Foucault and referring to the way in which the state can exercise indirect control at a distance.

“As cold as charity”? Or a cold, hard look at charity? The next debate, after Kids Company - Perri 6, Professor in Public Management, Queen Mary

Scandals about the award of public money to charities by way of grants or contracts and companies through contracts are hardly new. Ancient Rome was rocked by scandals about the contractors to the state. But a recent case raises some major and fresh issues about how these arrangements should be governed. The press has devoted acres of print to the collapse in 2015 of the children's charity, Kids Company, led by the charismatic figure of Ms Camila Batmanghelidjh, which had reportedly been awarded central government grants over a period of more than a decade, despite government officials' concerns and sometimes as a result of ministerial insistence. Several inquiries have been instituted. We are still waiting for the result of one by the Charity Commission into the way in which the charity was run and regulated, of one by the Official Receiver into the manner in which the charity finally went bust, and for the result of police investigations into abuse of children by some people allegedly connected with the charity. But now finally we have a fascinating, largely factual report carefully written without recommendations, by the National Audit Office (NAO), which is the body responsible for checking the propriety and value for money of government spending. The NAO wasn't asked or expected to find new evidence about whether Kids Company was effective or even cost-effective in the work it did with vulnerable children. Rather, its task was to look at what government departments did with the information they possessed about Kids Company, in making decisions about whether or not to award new grants and contracts.

Invitation to the Inaugural Lecture of Prof Pedro Martins - Understanding how to create more and better jobs - Wednesday 21st October 18:30

The School of Business and Management, Queen Mary would like to invite you to attend the upcoming inaugural lecture for Prof Pedro Martins, one of our Professors of Applied Economics. 

This event is free to attend and you can find further details and reserve a place here

Understanding How to Create More and Better Jobs 

Professor Pedro Martins
Wednesday 21st October 2015
18:30 - 20:30
Skeel Lecture Theatre, the People's Palace 

Lecture Synopsis: 

The labour market plays a critical role in the economy, in society and in our individual lives. Understanding how the labour market operates and how its functioning can be improved is very important for policy makers, firms and all citizens. Fortunately, the last 20 years have witnessed a marked improvement in theory, evaluation methods and data. In this lecture Professor Martins will present some of his contributions to the discipline. He will also call on a greater interaction between researchers in economics and other fields of study as well as other stakeholders to promote further improvements in labour market evidence, policy and outcomes. 

Meet our Professor - Professor Pedro Martins:  

Pedro Martins is Professor of Applied Economics at Queen Mary University of London, receiving his Professorship in 2009. Pedro’s main research area is labour economics, having published several articles in leading journals and collaborated with a number of international organizations, statistics agencies, multinational firms and NGOs. Between 2011 and 2013, Pedro served in the Government of Portugal, as Secretary of State for Employment. During that period, he conducted a number of reforms, in areas such as employment law, active labour market policies, and collective bargaining.

What will public management be like in Britain for the next five years? - Perri 6, Professor in Public Management, School of Business and Management at Queen Mary

Christopher Devereux - License: CC BY 2.0

If the voters will believe you, then a good way to get elected is to promise them that your government will spend less of their money and, at the same time, provide the people with more generous services. It is hardly a novel approach. But, provided the voters are not convinced by any alternatives they are offered, it can work. And in May 2015 at least in England although not in the rest of the United Kingdom, it did.

Having promised both things, how is the trick actually going to be done? And what will public management in Britain be like for those running our public services over the next five or even ten years?

Guest article: Latin America’s civil service ten years later: same old, same old? - Mariano Lafuente Inter-American Development Bank

Human resource management in the public sector is often neglected in Latin America because it can be politically very sensitive. But it is crucial for institutional effectiveness and, over the medium term, for legitimacy too. What public policies and public services can achieve depends heavily on the quality of the civil service. Moreover, public sector human resource management an field in which the region certainly has room for improvement.

Our recent book: “Serving Citizens: A Decade of Civil Service Reforms in Latin America (2004-2013)” analyses how human resource management has evolved in the civil service in sixteen Latin American countries during the last decade. The methodology is based on the Ibero-American Charter for the Public Service, signed by these countries back in 2003, and which was applied in 2004 and 2013.

What did we find? The region made progress in the last ten years, but not as much as we hoped when the Charter was signed. The regional average performance moved from 30 to 38 points out of 100. This average hides significant disparities among countries. One group has improved substantially, typically from a low base. This group includes El Salvador, Dominican Republic, Paraguay, Peru, but its rate of improvement leads us also to classify Chile in this group even though it started with a high score. Another group of countries has made less progress. This group includes Brazil, Mexico, Colombia, Uruguay, and Costa Rica, all of which began from high or at least medium level scores. However, it also includes Bolivia, Guatemala and Honduras which started from lower initial scores.

Getting to thirty eight - Prof Perri 6, Professor in Public Management, School of Business and Management, Queen Mary University of London

When their subject is dominating the general election debate in the media and among ordinary citizens, what could a public management academic possibly complain about?

Well, don’t get me wrong, I'm not bellyaching at all. Democracy doing its job ought to be celebrated, even when the news for the public services is hardly cheering.

But... (and you knew there’d be one...) it’s not at all clear yet that the politicians and journalists are focusing on all the big issues of public management that will really matter during the 2015-2020 parliament. Let’s start with those cuts which will follow the general election, as soon as a government is formed and its budget is prepared.

When Labour Market Reforms actually Reduce Unemployment - Prof Pierre Cahuc, Prof Francis Kramarz and Prof Pedro Martins

Recently, “Les Echos” journalist Dominique Seux observed that, in contrast with the abundant commentary on Greek economic woes, there is little discussion about the case of Portugal. A recent conference of Pedro Martins, one of the authors of this article and former Secretary of State of Employment in Portugal, provides us with the perfect occasion to revisit the recent evolution of Portugal’s labour market. 

Between 2008 and 2011, the minimum wage there increased by 20%. This increase was also broadly reflected in salaries beyond the minimum wage, thanks to centralized negotiation mechanisms featuring unrepresentative trade unions, with a membership below 10% that mostly represent permanent workers’ interests. Thus, when the recession started, these developments on wages amplified its impact on employment. From April 2008 to January 2013, unemployment rose from 8.6% to 17.7%, affecting mostly young workers. Permanent workers enjoyed one of the most restrictive regulations of the OECD, with its redundancy payments (one month per year of compensation) amongst the highest. In this situation, Portuguese youth was confined to temporary contracts, destroyed in a very large scale once economic activity cooled off. Among those below 25 years, unemployment rate surged from 20 to 40%. 

Taking the carbon out of economic growth – how to regulate financial institutions - Prof Colin Haslam, Professor in Accounting and Finance at Queen Mary

Image: Rochester Factory Credit: Ben Reierson License: CC BY 2.0

Reducing carbon emissions is a major global challenge. Over the last four decades the amount of carbon dioxide equivalent (CO2e) emitted annually into the atmosphere has increased from 32 billion tonnes to 45 billion tonnes and CO2e concentrations in the atmosphere are increasing at an annual rate of 1 part per million. If these trends continue, scientists expect that surface climate temperatures will increase to levels exceeding 2 degrees Celsius (2^oC) above pre-industrial levels. In turn, this could contribute to accelerate melting of glacial ice, higher tides, additional flooding and a host of other volatile climate related events.

Reducing CO2 emissions has been a legal obligation for governments under the Kyoto agreement, which has recently been extended from 2013 to 2020. It is a major challenge because, at a global level, although we are reducing carbon intensity per financial unit of GDP by about 1 percent per year, global GDP itself is growing at over 3 percent. So it is reasonable to expect that carbon emissions will continue to grow at 2 percent per annum. Any growth in emissions risks inflating temperatures closer to and even above the + 2^oC target, which governments have set in the climate negotiations at the UN.