24.09.12
Private sector could run £278bn of public services – CBI
Government could save over £22bn if public services were opened up to competition, a new report suggests.
The CBI believes that certain areas of the public sector, worth £278bn, should be open to competition from private companies, social enterprises and charities, to provide significant savings.
The areas the CBI highlights as most suitable for further competition include the management of social housing, school meals and prison management.
For £2bn worth of public services, the report suggests average cost savings of 11%. If extrapolated to the £278bn of public services the CBI believes should be more open, this equates to £22.6bn savings.
The CBI further points out that the idea has public support – a ComRes poll for the confederation showed 75% of people agreed that a variety of providers would be more successful.
Director general of the CBI, John Cridland, said: “It’s momentum we say is lacking. After the public service white paper we have seen some action in some parts of government, but we’re not seeing enough progress across government in enough of the areas to continue to improve quality and value … The government could be bolder; we think the public would have no problem with the coalition of the willing to provide this role.
“Most public services are still largely state monopolised and it's time to open some of them to competition.”
But Dave Prentis, general secretary of the trade union Unison, slammed the recommendation.
He said: “All the evidence shows that privatisation is a costly failure that the taxpayer can ill-afford. Privatisation failures carry heavy human costs – just ask an elderly resident of an ex-Southern Cross home. And, as the G4S Olympic fiasco clearly shows, when the private sector fails, the public sector has to pick up the pieces – including the cost.”
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