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The costs of putting out to tender a whole range of civil services functions since 1992 have outweighed the savings in at least a quarter of cases, an efficiency scrutiny published by the Cabinet Office shows.

The programme has damaged staff morale and left departments equally divided over whether quality has improved, stayed the same or got worse as growing parts of the civil service have been subjected to outside competition and in many cases privatised. The programme has nonetheless produced net savings of between pounds 240m and pounds 280m - around 13 to 15 per cent of the pounds 1.8bn worth of service subjected to competition. Government departments are getting better at handling the Competing for Quality programme, the study concludes. Nicholas Timmins