Last week, it was revealed that two private security firms – G4S and Serco – have potentially overcharged taxpayers by up to £50 million on electronic monitoring contracts. In some cases, bills may have been charged for the tagging of offenders who had died, were in prison, had left the country – or for those who had never even been put on a tag in the first place. These revelations cast doubt on the outsourcing mantra that competing private sector organisations always deliver better services at a lower cost. But while the G4S and Serco case has grabbed the headlines for now, it is not the only example. Public service markets are developing rapidly in employment, health and care – indeed, most areas – and are estimated to be worth nearly £115 billion. The Institute for Government’s new report Making public service markets work: professionalising government’s approach to commissioning and market stewardship, released yesterday, found that government is struggling to get the results it wants in four key areas: employment services (the Work Programme), probation, schools and care for older people. Across all four sectors examined, ‘gaming’ was a recurrent problem with providers sometimes responding in undesirable ways to the […]

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