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The success of Hinchingbrooke Hospital shows when the state should welcome the private sector - and when it shouldn't

What quality does Circle have that the big outsourcing companies do not?

When is outsourcing of public services good and when is it bad? As the Government is engaged in a manic, indiscriminate drive to dismantle the state, this is an important question. Next up for consideration are children’s social work services in England, including child protection.

Start with a good example of outsourcing. Hinchingbrooke Hospital serves more than 160,000 people in Huntingdon, Cambridgeshire. Some two and a half years ago, Government ministers described it as a “financial and clinical basket case”. The Royal College of Surgeons called the 369-bed hospital “dysfunctional”. And it was among the lowest ranking trusts in the region for patient satisfaction.

Then in February 2012 its management was outsourced to Circle, an employee co-owned partnership “with a social mission to make healthcare better for patients”. It claims to be the largest partnership of healthcare professionals in Europe and is “co-founded, co-run and co-owned by clinicians”.

The improvement has been dramatic. It has just been awarded the top Quality of Care Award. Alongside it in the shortlist were famous London hospitals whose management is not outsourced such as Chelsea and Westminster and Guy’s and St Thomas’. The presence of the London hospitals on the shortlist is telling because it shows that this is a case where the distinction between public and private sector is irrelevant. In fact, I know the Chelsea and Westminster Hospital. Its levels of service compare with the best. So Hinchingbrooke did exceedingly well to come first out of such a distinguished list. But if the reason is not, as the Conservative Party unthinkingly believes, the intrinsic merits of private sector provision, what is it?

Or, to put it another way, what quality does Circle have that the big outsourcing companies do not? What is about Serco, for instance, has brought its “shoddy” housing of asylum-seekers under fire? How come that G4S has suffered the disgrace of having to repay the Government £109m plus VAT for overcharging on the electronic monitoring of offenders, including for those who were dead? What led Atos, when carrying out work capability assessments of disabled adults, to get so many of its judgements wrong – so that four out of every 10 of its decision have been overturned on appeal? After this particular debacle, a very cross Secretary of State for Work and Pensions, Mr Duncan Smith, had to tell The Andrew Marr Show: “We have now actually asked [Atos] to go, to leave. They didn’t ask us to go, we have asked them… They will actually pay reparations for failure to achieve what they were meant to achieve.”

The difference is in focus. Circle does only hospitals. It describes its mission as being “to run great hospitals dedicated to our patients”. And it adds: “By putting doctors and nurses in charge of our hospitals, and making all employees owners, we empower our people to go the extra mile for our patients.” Now while a certain amount of cynicism is in order when reading mission statements, it is clear that what Circle is trying to do is run hospitals properly. And with focus comes innovation, which leads to patient satisfaction.

On the other hand, companies such as Serco, G4S, Atos and Capita appear willing to take on any activity that the Government will pay for. Run prisons? Yes, never done it before, but yes. Handle all the telephone queries that prospective students, teachers and parents have about university degree courses? Why ever not. Provide security at the 2012 Olympic Games? Yes, well within our capabilities. Essentially the outsourcing companies are experts solely in making money out of government contracts – a task made easier by the poor management capabilities of government departments, generally starting with the Secretary of State.

These outsourcing companies do not seek to focus on the job in hand more than is necessary to earn their fees. Their skills, perfected from job to job, lie in such activities as gaming the terms of the contract with the government. Thus the Institute for Government found last year that in all areas providers sometimes responded in undesirable ways to the reward structures created by commissioners and regulators. Such “gaming” behaviours included excessive “parking” of service users with complex needs and “creaming” of users who are easier to support, and therefore more profitable to serve.

In this light, child protection is an interesting test case. If the 37 senior social services academics led by professor Ray Jones of Kingston University were right when they recently argued that “England has one of the most successful child protection systems in the world”, then this public service should be out of bounds for outsourcing companies and their tricks of the trade.

Prince Charles has undermined the West’s relations with Russia

It is, admittedly, hard being heir to the throne when you have spent such a long time waiting in the wings. Too difficult for Prince Charles, at any rate. On his umpteenth royal tour, which took him to Canada, he remarked to a Canadian woman whose family had suffered in the Holocaust: “And now Putin is doing just the same as Hitler.”

This comment is more than an embarrassing gaffe. He has done what the Queen would never do: he has intervened in a tense diplomatic situation of great seriousness. Foreign policy is a matter for Her Majesty’s ministers alone.

Worse still, the Russian leader will understand the prince’s comparison between himself and Hitler as a dreadful insult. Only two weeks ago, Russia was celebrating the anniversary of its victory in the Second World War. In that fight, about 10 million troops of the former Soviet Union were killed by German armed forces.

The heir to the throne, with his careless words, has done a disservice to British interests. A President Putin who believes he has been slighted in this way will be, for that reason alone, less willing to reach agreements with the United Kingdom about the many matters of common interest that the two countries share – from supplies of natural gas to the status of Ukraine. Nor is it something that an apology would wash away.

In fact, Vladimir Putin is due to join US President Obama and European leaders in France next month for a ceremony marking the 70th anniversary of the D-Day invasion. This will be the first time Putin and Western leaders have come face to face since the outbreak of the crisis in Ukraine. It could be a very important occasion. Unfortunately, Prince Charles is also due to attend. It would be better if he stayed away.