Thursday, 19 November 2015

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.

Wednesday, 4 November 2015

“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.