It found that introducing market forces to the service, which was previously run by local authorities, had represented "a significant and costly administrative burden".
Despite the cost, the process had failed to stimulate the creation of new private-sector providers to bid for the contracts. Instead, the vast majority of careers services were still being run by local authorities, though usually in partnership with training and enterprise councils.
The NAO also found that, though contracting out had provided competition, it had also had a damaging effect on co-operation and sharing of good practice between careers services.
The report recommends replacing the present approach with a system of licenses for careers services when current contracts expire. The DFEE should look again at target-setting, to establish a more flexible system while being ready to enforce sanctions, the study concludes.Reuse content