Civil Service White Paper: Market-testing initiative is given a quiet burial

Chris Blackhurst@c_blackhurst
Wednesday 13 July 1994 23:02

ONE OF the most controversial innovations of the past few years has been the introduction of 'market testing' - comparing Civil Service functions with the private sector to try to assess efficiency.

The two words have become a catchphrase for conflict with the unions and accusations of privatisation under another name. Frequently, after a service has been measured, the decision is made to contract it out or sell it off completely.

So far, pounds 1.3bn worth of Civil Service activity had been examined in this way. Savings of at least pounds 150m have been achieved and 14,500 jobs have been cut - 12,200 of them through contracting out.

But the programme has not only attracted the predictable ire of the unions; no less a figure than Sir John Bourn, head of the National Audit Office, the public spending watchdog, told MPs last year that market testing was making his job more difficult. The NAO has no right to examine the books of private companies that win contracts to carry out public services. There were no means of telling, he said, whether taxpayers' money was being spent properly or as efficiently as was being claimed.

Even Sir Robin Butler, head of the Home Civil Service, was forced to acknowledge to a Commons committee that the programme was 'very disturbing and very worrying for staff'. He admitted that, largely owing to 'management difficulty', targets for the initiative had not been met.

In what was interpreted by the Government's opponents yesterday as a climbdown, the much-reviled scheme was quietly pushed to one side. Under the White Paper, it will now be up to individual departments to devise their own efficiency plans: 'The Government believes that departments should now be given greater freedom and flexibility to develop programmes for improving efficiency which best meet their own needs, with less detailed central oversight of those plans.'

Departments will have to submit efficiency plans each spring telling the Cabinet Office and Treasury how they propose to stay within budget. If they want to market test and contract out, they can - but, from now, they are under no obligation to do so.

Elizabeth Symons, general secretary of the First Division Association, the senior civil servants' union, said the move was 'a tacit admission that market testing has not worked'.

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