Market Testing
Drawing on the lessons from CCT, in the early 1990s, the UK government introduced a policy of market testing public services in central government, testing their efficiency by exposing them to competition from external providers. It was less relevant whether the service was actually contracted to the private sector, but rather that it was subjected to competitive challenge.
While this policy was not pursued across government as a whole, it has continued to be used by the Labour Government in various sectors where public provision was perceived to be failing.
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Making and Managing Markets: Contestability, Competition and Improvement in Local Government (PDF)
Grace, Clive; Fletcher, Keith; Martin, Steve and Bottril, Ian, 2007
Audit Commission and Centre for Local and Regional Government, Cardiff University
A research report based on a review of theory and a number of case studies, which informed the Audit Commission's 'Healthy Competition' report, below. It suggests that in mature public service markets more sophisticated forms of market mechansim must be employed to maintain service improvements.
UK
Healthy Competition: How Councils Can Use Competition and Contestability to Improve Services (PDF)
Audit Commission, 2007
This report suggests that competition and contestability can be used to generate benefits for taxpayers and service users although councils must be pragmatic in using these market mechanisms and the right expertise in procurement and contract management are required coupled with the accurate information on delivery costs, management costs and service performance.
UK
Improving Productivity in Scotland's Public Services (PDF)
Armstrong, Jo, 2007
The David Hume Institute
UK
HM Treasury: Tendering and Benchmarking in PFI (PDF)
Public Accounts Committee, House of Commons, 2007
The Stationery Office
This report examines whether issues around PFI tendering which were flagged up by the PAC in 2003 are being addressed. It also considers the early experiences of the few PFI projects to have carried out value testing by summer 2006. It finds that the PFI procurement process has not improved since that 2003 report - increased competitiveness in the market is essential for the rewards of PFI to be reaped.
UK
Benchmarking and Market Testing the Ongoing Services Component of PFI Projects (PDF)
National Audit Office, 2007
The Stationery Office
This report examines early examples of benchmarking and market testing techniques in measuring the value of PFI contracts in public services. It finds that value for money has been achieved through value testing in about half of cases. In other cases - including some where the private sector negotiated price increases during these processes - the data are uncertain on whether value for money has been achieved.
UK
Better Quality Services: Guidance for Senior Managers (Web Page)
Cabinet Office, 1998
The Stationery Office
This report (a shorter version of the Handbook - available below) sets out the twelve guiding principles to be used in market testing and contracting out, the key stages in reviewing services and activities, and various effects and issues that may be raised.
ISBN 0 11 430152 2
UK
Better Quality Services: A Handbook on Creating Public/Private Partnerships Through Market Testing and Contracting Out (Web Page)
Cabinet Office, 1998
The Stationery Office
Along with the report (above) this handbook gives guidance on achieving the Government's objectives through competition, and the private sector, in particular through market testing and contracting-out.
ISBN 0 11 630964 4
UK
The Role of the Civil Service
House of Commons Treasury and Civil Service Committee, 1994
This report suggests ways to equip the Civil Service for the demands of the 21st century. The report analyses changes that may be required or anticipated in relation to the development of government initiatives such as the Citizen's Charter and the Next Steps Initiative. Some of the suggestions include ways of opening up the Civil Service to privatisation and greater opportunities for contracting and service-level agreements.
ISBN 0 10 020654 9
UK
The Government's Guide to Market Testing
Efficiency Unit, Office of Public Service and Science, 1993
The Stationery Office
UK