The Cabinet minister responsible for Whitehall told a meeting in London of the Institute of Directors that, while the Government would always prefer to privatise services, 'we understand now, with a decade of experience under our belts, that it is not simply ownership that matters.
'As fundamental as the division between public and private is the distinction between competition and monopoly.'
Mr Waldegrave said that when services remained in the public sector the Government would either bring in private suppliers, or make sure that the public sector delivered services as good as those offered by the private sector.
'Public services serve some of our most fundamental needs and it is rightly considered to be the sign of a civilised society that its citizens should have access to decent services,' he said.
'They also cost a lot of money. Last year the cost was pounds 3,800 for every man, woman and child in this country. So, where the taxpayer foots the bill, it also matters that public services are provided as efficiently and effectively as possible.'
Mr Waldegrave said the money spent each day on the National Health Service had, in line with public demand, trebled in real terms from pounds 30m to pounds 90m between 1963 and last year, while education costs more than doubled from pounds 37m to pounds 77m a day.
'When we finally woke up to the scale of the problem we were facing we found that, although we could measure to the penny how much went into our public services, we had an inadequate idea of the cost or value of what was delivered. Nor did we know whether what we produced was actually what people wanted or needed.'
Mr Waldegrave said that while services were dished out to everybody, while fitting nobody, such a wasteful use of taxpayers' money was not just inefficient, it was also 'inexcusable'.
That process was now being changed with a new-found emphasis on the quality of delivery, with an injection of entrepreneurial spirit into the very heart of government - through the creation of 70 Next Steps agencies, public-private sector competition for service delivery, and changes that would allow public sector managers 'to buy services wherever they can find the best deal for their customers'.
Mr Waldegrave said: 'People in the public services want to do it better. It is the system that beats them. So we are changing the system.'
But he also said that the Citizen's Charter - 'one of the most radical things we have ever tried to do' - would ensure that the remaining public services deliver the best possible value, and the highest practicable quality, through public accountability, with the publication of both standards and results.
'It puts pressures on the providers of services to treat customers well, and to be called to account if they do not,' he said. 'And it empowers the providers with the managerial responsibility which, for too long, has been denied them.'Reuse content