James Moore: Getting business involved in the public services is not the panacea it seems

Outlook: If you're going to ask businesses to run public services, you have to be very sure that you get the contracts right
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The Independent Online

Here come the cuts, then. Today's emergency Budget might not be quite as nasty as some had feared – there's been a careful softening-up exercise in operation from our political masters over the past few days with the aim of making us all feel grateful when the pain is not as brutal as we've been led to believe. But make no mistake, today is not going to be much fun, for anyone.

Amid all the slash and burn will be lots promises to make the business of Government more efficient. And, presumably, that means bringing more business into Government.

A notable feature of the recent round of trading statements is that not all of the companies which rely on the public sector for much of their revenues have been boasting the long faces that you might have expected.

Some of them have even been cautiously optimistic. The reason for this is that they are expecting that the Conservatives will attempt to put vast swathes of the public sector out to tender, with the aim of saving money.

Trouble is, get this wrong and it can end up costing you a whole lot more than you ever intended to save. The private sector has not always proved that it is any better at running things than the public sector – sometimes it seems as if there's very little difference.

The Conservative mania forgetting businesses involved with the public sector continued under New Labour and was even expanded with wheezes like "public- private partnerships" which have done such a fantastic job of, say, renovating London's Underground or even building primary schools (where there have been instances of toilets being set too high for younger kids to use).

The assumption has always been that the private sector does it better. But is that always the case? It's true that businessmen are often very good at finding efficiency savings that the Sir Humphreys in Whitehall and their Quangocrat colleagues miss.

A focus on the bottom line is helpful in that respect. But it is that focus on the bottom line that can lead to trouble. If you're going to ask businesses to run public services, you have to be very sure that you get the contracts right. If you don't, things can go very wrong, very quickly. And getting contracts right is not something that civil servants have proved to be very good at in the past.

It's also true that when you're busy slashing and burning, things can easily get missed. Still, at least its one way of bringing down the number of public sector staff, and the need to pay them public sector pensions. Action has been promised on those too, but given the struggles to come, would it be any surprise if this group of ministers takes one look at the issue and says: pensions, really, it's going to take years before they get awful. Let's leave 'em for the next lot.