Government rows back from wholesale outsourcing of public services: BBC

The government has rejected the wholesale outsourcing of public services to the private sector as politically unpalatable, according to documents leaked to the BBC.

A note of a meeting between Cabinet Office Minister Francis Maude and the CBI Director-General John Cridland, drawn up by the business group, said: “The minister's messages were clear cut... the government is committed to transforming services, but this would not be a return to the 1990s with wholesale outsourcing to the private sector – this would be unpalatable to the present administration.

"The government was not prepared to run the political risk of fully transferring services to the private sector with the result that they could be accused of being naive or allowing excess profit making by private sector firms."

According to the BBC, private sector involvement will be limited to joint ventures with not-for-profit groups.

The CBI note added: "Government is very open to ideas for services currently provided within the public sector to be delivered under a private/government joint venture. Government is committed to new models of partnership, and private sector organisations need to offer joint ventures – joint ventures between a new mutualised public sector organisation and a 'for profit' organisation would be very attractive.

"Government... was very interested in turning existing services into government companies. These would avoid the downsides of 'hassle' and adverse political reaction."

The government’s plans are expected to be unveiled in the Open Public Services White Paper, which was originally set for publication in February this year but is now thought likely to come out this summer.

The Prime Minister, David Cameron, has previously said the White Paper would “signal the decisive end of the old-fashioned, top down, take-what-you’re-given model of public services”.

This would include a new presumption that public services should be open to a range of providers competing to offer a better service.