Alison Scott 16 August 2011

Money Matters

The Open public services White Paper aims to recognise new delivery models which will have profound implications for local authorities – they will need to improve their skills in commissioning, risk assessment and contract management.

Scrutiny must now be reviewed to ensure third party organisations are held to account for spending public money. However, although the paper claims citizens will have more control over the services they receive, this may not prove true.

Residents will still hold councils responsible for the poor performance of any services outsourced, yet the council might be unable to make changes due to the constraints of its contract.

The scaling-back of regulation and inspection could result in the public having less, not more information to inform their choices. It will be difficult to negotiate deals allowing services to be personalised to customer’s requirements.

Existing contracted-out services tend to be for standardised services provided in the same way to all making it straightforward to measure costs and activity, and manage the contract. If services are tailored to individuals’ needs, it becomes harder to set out in a tender the contract’s scope and cost. One further danger is that the additional tendering and contract-management requirements will feed into contracts whose costs become prohibitive.

Noticeable by its absence, is the Big Society. Ministers had heralded the paper as an opportunity for voluntary groups to become involved in delivering public services, yet their role is downplayed in the final version, and the Big Society hardly merits a mention.

Given the concerns over contract tendering, and that any attempt to give voluntary groups preferential treatment would fall foul of EU law, the White Paper at first reading does not provide a solution to creating a dynamic third sector market.

Alison Scott, is assistant director, local government finance at the Chartered Institute of Public Finance and Accountancy

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