Probe to assess private role in public purchasing

13 December 2007
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13 December 2007 | Helen Gilbert

The role of the private sector in supplying public services is to be explored in a new study.

Announced by business secretary John Hutton, it aims to establish the size of the supply market and review the rising involvement of private firms in the delivery of public services.

Hutton described the so-called "public service industry" as having "huge potential". In 2005/06 the government directly procured £115 billion of goods and services.

But he added: "We need a greater understanding of its existing contribution."

The review will be led by DeAnne Julius, chairman of foreign policy think-tank Chatham House. It will investigate the value and competitiveness of the industry by sector - health, education, welfare, defence, transport and home affairs - and capability.

It will be the first time the total value of the industry, including supply chains, key trends and contribution to economy, is "comprehensively analysed", the Department for Business, Enterprise & Regulatory Reform said.

David Pointon, chairman of the Society of Procurement Officers in Local Government, described the review as a "fantastic opportunity to take an holistic view of the central government supply chain".

"The exercise will need to concentrate on the outcomes that we require of the supply market and it will need to have sufficient granularity to be linking in with national, regional, sub-regional and local supply markets."

Neil Bentley, CBI director of public services, said the government would need to move rapidly from a "period of study into a time of action".

The results of the review are due in summer 2008.

SMdec2007

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