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A bit of competition can go a long way

28 Tachwedd 2007

British public services can do considerably more to use competition to improve their efficiency for service users and tax payers, an independent study from a Cardiff Business School research centre has shown.

Debate around introducing more market-driven tools such as competition and contestability to deliver public services has been mounting as pressure increases to improve value for money.

Against this backdrop, the Business School’s Centre for Local and Regional Government Research was commissioned by the Audit Commission to look into how effective such methods can be in delivering better services.

Following a nine month study of councils that have been at the forefront of using contestability and competition to improve their services, the research team led by Dr Clive Grace and Professor Steve Martin revealed that it was not only knowing how to use these tools in all their forms but when to use them that counts. The findings have been published by the Audit Commission in Healthy Competition, which calls for councils to take more open-minded and creative approaches to service delivery.

Professor Steve Martin, director of the Centre, said: "Competition is just one way of testing services and will not always be the best approach. Sometimes other forms of contestability - for example a council comparing its performance with other local authorities, or giving service users a greater say in how services are delivered – will provide a better platform to encourage innovations in service provision.

"Public services need to know how to use different types of contestability and under what circumstances. There isn’t a one size fits all solution which is why we are calling for a greater focus by local authorities, central government, regulators, and improvement agencies, on the more widespread use of contestability rather than just competition to drive the reforms across the public sector."

The Centre’s study explored the arguments for and against increased private sector involvement in the provision of public services, looked at whether competition actually improves local government services, and considered the conditions under which competition and contestability can be successfully introduced.

The Centre’s report ‘Making and Managing Markets: competition, contestability and improvement in local government’, is available on the Audit Commission’s website.