Municipal Services
Municipal services have been commonly contracted out since the 19th century, but since the 1970's and 80's there has been a new interest in the use of competition to lower expenditure and increase efficiency. The spending patterns of many US cities have been studied to find out their association with alternative methods of service delivery whilst in the UK the impact of the Compulsory Competitive Tendering policy in the 1980's and 90's has been analysed in some depth. Evidence has also been collected from Europe and Australia.
United States
Contracting Out Parks and Reacreation Services: Correcting for Selection Bias Using a Heckman Selection Model (PDF) Jang, Hee Soun, 2006 International Journal of Public Administration, 29, pp.799-818 A study which compared the effect of contracting out on the costs for parks and recreation services using the public, private and non-profit sectors. US
Contracting out Local Government Services to Non-Profit Organizations (PDF) Jang, Hee Soun, 2006 Askew School of Public Administration and Public Policy, Florida State University, PhD Thesis A study which compared the effect of contracting out on the costs for six services (electricity, fire protection, police, parks, libraries and public health) using public, private and non-profit sectors. US
Competition Between Public Agencies and Private Vendors: Vehicle Maintenance Services in Greeley Sterling, Jack, 1999 Contracting Out Government Services; Seidenstat , Paul (ed); Westport: Praeger Publishers; chapter 16 A case study by the Director of Public Works for Greeley, Colorado on the competition for two vehicle maintenance contracts, between private contractors and the in-house team. US
Privatization as a Viable Alternative for Local Governments: The Case Study of a Failed Michigan Town Kleiman, Robert and Sahu, Anandi, 1999 Contracting Out Government Services; Seidenstat , Paul (ed); Westport: Praeger Publishers; chapter 10 A case study of Ecorse, a small Michigan town, which went into receivership in 1986. The court-appointed receiver carried out a comprehensive restructuring of city services through privatisation, contracting, competition and renegotiation of employment contracts which turned around a budget deficit of $6m to a surplus of $95,000 in 1990. US
Privatization of Municipal Services in America's Largest Cities Dilger, Robert Jay; Moffett, Randolph R. and Struyk, Linda, 1997 Public Administration Review, 57, 1, pp.21-26 A report based on a survey covering 66 of America's most populated cities. It asked senior public officials about their level of satisfaction with contracted services and their estimates of cost savings and service improvements. US
Bureaucracy, Organizational Redundancy and the Privatization of Public Services Miranda, Rowan and Lerner, Allan, 1995 Public Administration Review, 55, 2, pp.193-200 A study covering 539 cities which compared the impact of mixed public/private provision of local services, or 'joint contracting', to that of 'complete contracting' by solely using external providers to deliver services . It found that joint contracting was more strongly associated with lower total municipal expenditures. US
Does Privatization Make a Difference? The Impact of Private Contracting on Municipal Efficiency Greene, Jeffrey D., 1994 International Journal of Public Administration, 17(7), pp.1299-1325 A study which compares six cities delivering the majority of their services via contracting arrangements with six cities of similar size and scale that do not and ranks them on the basis of productivity. The study found lower costs in contracting cities these differences were not found to be significant, although this may have been partly due to the small sample size. US
Privatization and the Budget Maximizing Bureaucrat
Miranda, Rowan, 1994
Public Productivity & Management Review, 17, 4, pp.355-369
An Empirical Analysis of Contracting Out Local Government Services Martin, Dolores T. and Stein, Robert M., 1992 Contracting Out Government Services, Bowman, G; Hakim, S. and Seidenstat, P. (eds), McFarland Publishing, chapter 7 A study which seeks to identify the determinants and distribution of efficiency savings from contracting using data on service delivery, expenditure, employment and fiscal pressure from 877 cities. Total expenditure is found to decrease as a result of contracing but not significantly when more than 25% of services have been contracted. Employment is only found to decrease significantly above the 25% contracting level. US
The Budgetary Effects of Municipal Service Contracting: A Principal-Agent Explanation Stein, Robert M., 1990 American Journal of Political Science, 34, 2, pp.471-502 A study using data from 1433 US cities which examines the proposition that contracting is used by municipal officials to lower service costs. The results suggest that savings are often recycled within agencies and this leads to more static budgetary requests for service delivery but not necessarily lower taxes. US
Privatization and Cost Reduction Pack, Janet R., 1989 Policy Sciences, 22, pp.1-25 A study of the effects of competition and contracting on a variety of local services in 15 cities over three years to assess their sustainability. Substantial savings are found initially which are observed to decline after conducting follow-up interviews with public officials. However, the level of competition for delivery of services seems to be related to the relative magnitude of savings and underbidding is not found to be a related to the larger savings. US
The Public Spending and Employment Effects of Local Service Contracting (PDF) Ferris, James M., 1988 National Tax Journal, 41, 2, pp.209-217 A study using data from 500 US cities which found significant links between contracting at the local level and lower municipal expenditure and public employment. US
Delivering Municipal Services Efficiently: A Comparison of Municipal and Private Sector Delivery Stevens, Barbara J. (Editor) and Ecodata Inc., 1984 U.S. Department of Housing and Urban Development, Office of Policy and Research A study prepared for the US government which compared ten cities which used contracting-out to private-for-profit firms for eight services to ten cities delivering the same services through public means. It also examined differences in personnel management and technological innovation between the two. USA
The Expenditure Effects of Alternative Public Supply Institutions Deacon, Robert T., 1979 Public Choice 34, pp.381-397 A study comparing 23 Lakewood cities which purchase most of their services from external suppliers with 41 cities which provide most of their own services. It was found that purchasing authorities spent 14% less than their non-purchasing counterparts although no adjustments were made to control for quality of service. USA
United Kingdom
List of Resources:
Contracting Out of Local Government Services in the UK: A Case Study in Transaction Costs Kavanagh, Ian and Parker, David, 2000 Research Paper no.9, Aston Business School, Aston University A study on the externalisation of the London Borough of Ealing's Technical Services Group for engineering, environmental and property services (highways and grounds maintenance, refuse collection, street cleansing, architecture and design services) in 1994-99 ISBN 1 85449 394 9 UK
CCT and Local Authority Blue Collar Services [Link to Executive Summary] (Web Page)
Austin Mayhead & Co. Ltd, 1997
Department of the Environment
Achieving Value for Money Through Competition: CCT/Market Testing in Northern Ireland - Case Studies and Survey Analysis,
Chartered Institute of Public Finance and Accountancy (CIPFA), 1996
A report covering the introduction of compulsory competitive tendering in Northern Ireland for refuse collection and street cleaning.
Compulsory Competitive Tendering in Northern Ireland Local Government: The End of Round One Knox, Colin and Young, William, 1995 Local Government Studies, 21(4), pp.591-606 A study on the roll-out of Compulsory Competitive Tendering (CCT) to Northern Ireland for refuse collection and street cleaning in 1994-95. UK
A Non-Parametric Approach to Identifying the Sources of Cost Savings Arising from Competitive Tendering
McMaster, Robert, 1995
Applied Economics Letters, 3, pp.463-466
A study on the sources of cost reductions from 17 councils which had competitively tendered 109 health and 86 local authority contracts.
Competitive Tendering in UK Health and Local Authorities: What Happens to the Quality of Services? McMaster, Robert, 1995 Scottish Journal of Political Economy, 42, 4, pp.409-427 A study which tested the impact of compulsory competitive tendering on service quality in 21 UK health and local authorities between 1989-90. UK
Competition and Service: The Impact of the Local Government Act 1988
Walsh, Kieron and Davis, Howard , 1993
Department of the Environment
Competitive Tendering for Local Authority Services: Initial Experiences
Walsh, Kieron, 1991
Department of the Environment
The Politics of Privatisation: Contracting Out Public Services Asher, K. , 1987 MacMillan Education An analysis of the implementation of the Conservative government's competitive tendering policy in its early years in the health and local government sectors. ISBN 0 333 40392 4 UK
Competitiveness and Contracting Out of Local Authorities
Audit Commission, Occasional Papers No.3, 1987
The Stationery Office
Contracting-Out in Health and Local Authorities: Prospects, Progress and Pitfalls
Hartley, Keith and Huby, Meg, 1985
Public Money, September Issue pp.23-26
Europe
List of Resources:
Public Versus Private Production and Economies of Scale Christoffersen, Henrik; Paldam, Martin, and Wurtz, Allan , 2007 Public Choice, 130, pp.311-328 An examination of school cleaning in 189 Danish municipalities, covering 1,081 schools, which compared the costs of public and private service provision. Denmark
Is Private Delivery of Public Services Really Cheaper: Evidence from Public Road Maintenance in Denmark Blom-Hansen, Jens, 2003 Public Choice, 115, pp.419-438 A study comparing public and private costs from 273 Danish Municipalities between 1988 and 1999. It is estimated that private delivery reduces average expenditure by 2%. Denmark
Australia
List of Resources:
Tender Business: Contracting of Grounds Maintenance in the City of Bendigo
Kwan, Ian with Domberger, Simon, 1995
(eds.) Domberger, Simon and Hall, Christine, The Contracting Casebook: Competitive Tendering in Action, Canberra: Australian Government Publishing Service
Cultural Change: Competitive Tendering and Contracting in Local Government Jensen, Paul and Fernandez, Patrick with Hall, Christine, 1995 The Contracting Casebook: Competitive Tendering in Action, Simon Domberger and Christine Hall (eds), Canberra: Australian Government Publishing Service, 1995, Chapter 8 Case studies of three Australian councils which described the impact of competitive tendering on local services in Clare, Manly and Mosman. Australia
Aspects of Competitive Tendering and Contracting in Local Government Administration
Rimmer, Stephen , 1993
PhD Thesis, University of New England, New South Wales
A Case Study in Competitive Tendering and its Implementation: Australia
Rimmer, S., 1991
Privatisation and Public Enterprise: The Asia-Pacific Experience, G. Gouri (ed), Asian and Pacific Development Centre and the Institute of Public Enterprise, Hyderabad, Chapter 22
An overview of the outcomes and lessons learned from the competitive tendering of road sealing, mechanical street sweeping and municipal tipping facilities in Glenorchy, a small Tasmanian city.
Breach of Contract: Privatisation and the Management of Australian Local Government
Evatt Research Centre, 1990
Pluto Press