2 results
1 - How can we Stop Privatisation of Public Services?
- Edited by Sue Konzelmann, Susan Himmelweit, The Open University, Milton Keynes, Jeremy Smith, John Weeks
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- Book:
- Rethinking Britain
- Published by:
- Bristol University Press
- Published online:
- 11 March 2021
- Print publication:
- 19 September 2019, pp 184-189
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Summary
What's the issue?
UK outsourcing, or external procurement, is now huge in scale, and channels a significant proportion of national and local public budgets. In 2014/15 the UK spent almost one-third of total government expenditure on external suppliers. Past governments’ efforts to steer this spending towards non-profit ‘social’ providers, such as social enterprises and cooperatives, have not relieved the pressure to monetise and commercialise outsourced services, steering them towards profit generation and undermining their focus on social need.
What policy should a progressive government apply to public sector procurement in order to end overt and covert privatisation of public services?
Analysis
From 1997, the concept of ‘social enterprise’ was promoted by New Labour as a welfare reform initiative, because ‘the welfare state's capacity to meet modern social problems is limited’. Since then, a raft of New Labour and Conservative funding and policies have facilitated delivery of public services by the ‘third sector’ organisations with distinct forms of ownership, governance and motivation that operate alongside the public and private sectors. More than £1 billion has now been spent by government and the Big Lottery Fund to subsidise social investment, using private funds, in third sector delivery.
Third sector organisations include social enterprises (accountable to a community or charitable organisation), cooperatives (owned by their employees) and mutuals (owned by their customers as shareholders). Although they claim they are different through seeking to cover their costs while donating or reinvesting any surplus, depending on their structure, some do distribute profits to external investors. Although opposed by many in the cooperative movement, one of the motivations for community interest companies, introduced by New Labour in 2004, was to allow private investment and distribution to investors.
The claim made by this range of ‘social organisations’, often heightened by their being embedded in communities they serve, is their potential to combine the public sector's social purpose with a focus on efficient service delivery and satisfying customer demand. However, many in central and local government now view them simply as low-cost delivery structures, not least because of their exploitation of the voluntary labour and non-financial motivations of their workforce. For public sector workers, outsourcing to these third sector organisations for local government and NHS delivery now represents just as big a threat as outsourcing to the private sector.
Seven - Social Impact Bonds: shifting the boundaries of citizenship
- Edited by Kevin Farnsworth, University of York, Zoë Irving, University of York
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- Book:
- Social Policy Review 26
- Published by:
- Bristol University Press
- Published online:
- 07 March 2022
- Print publication:
- 26 June 2014, pp 119-136
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Summary
Introduction
One result of the reforms pursued by governments across the world to reduce public expenditure deficits since the 2008 financial crisis has been a growing interest in outsourcing the funding and delivery of welfare services. In the UK context, austerity measures and the demand for greater policy innovation have been strongly associated with the application of market incentives and business principles to social welfare provision. For example, the UK Cabinet Office's Green Paper Modernising Commissioning (Cabinet Office, 2010) reaffirmed the government’s commitment to extending payment by results (PbR) mechanisms across public services. The UK government has declared that ‘new forms of commissioning and contracting … improve both the outcomes derived from delivery of public services and the value for money achieved by public expenditure’ (Cabinet Office, 2013a).
Social Impact Bonds (SIBs) are the most recent example of this policy trend. According to their supporters, ‘SIBs offer an answer to a question all policy makers are facing in these difficult fiscal times: How do we keep innovating and investing in promising new solutions when we can’t even afford to pay for everything we are currently doing?’ (Azemati, et al 2013, p 24). SIBs harness private investment to finance innovative welfare services, and the strength of the UK government's interest in them is testified to in its creation of a Centre for Social Impact Bonds within the Cabinet Office and the establishment of a £20 million Social Outcomes Fund designed to support the development of PbR methods and SIBs (Cabinet Office, 2013b). However, interest in SIBs is international – they are currently being considered or developed in the US, Canada, New Zealand, Australia, Columbia, India, Ireland and Israel in relation to a wide range of policy areas, including reducing offending and recidivism, tackling homelessness, employability and active labour market measures and provision of early years education (Robinson, 2012). The possibility of extending the SIBs model to create Development Impact Bonds to fund social and medical programmes in the developing world has also been proposed (Rosenberg, 2013).
SIBs are certainly an interesting idea, but they are also a significant innovation in how social welfare services are funded and provided.