Contractual provision of public services, commitment, and trust
| Published date | 01 September 2021 |
| Author | TONY PROSSER |
| Date | 01 September 2021 |
| DOI | http://doi.org/10.1111/jols.12310 |
DOI: ./j ols.
ARTICLE
Contractual provision of public services,
commitment, and trust
TONY PROSSER
Law School, University of Bristol, Wills
Memorial Building, Bristol, BS RJ,
England
Corresponding author
TonyProsser,Law School, University of
Bristol,Wills Memorial Building, Bristol,
BSRJ, England
Email:t.prosser@bristol.ac.uk
Abstract
Trust is a central concept in the regulation of pub-
lic services. Two different models of trust can be dis-
tinguished, involving the creation of either substantive
credible commitments or institutions to promote more
collaborative relations. In this article, the differing impli-
cations of these two models are assessed through an
examination of failed United Kingdom examples of the
use of contracts for the provision of public services: the
procurement of passenger rail services by means of fran-
chises and the contracting out of a major part of the
probation services. It is suggested that their problems
can largely be explained through a failure to recognize
the second model of trust in contractual provision, and
possible institutional alternatives that might do so more
fully are explored.
1 INTRODUCTION
Trust is a central concept for assessing regulatory institutions and the delivery of public services.
There has been a good deal of examination of the role of trust in regulatory enforcement, and
in the ability of governments to establish clear commitments to regulated enterprises in order
to provide a stable environment for investors.My aim in this article is to address a somewhat
different question. What is the best means to facilitate the development of trust where public
services are delivered by private providers? Indeed, what does trust mean in this context?
See F. Six and K. Verhoest(eds), Trust in Regulatory Regimes (); N. Gunningham and D. Sinclair,‘Regulation and the
Role of Trust:Reflections from the Mining Industry’ () J. of Law and Society . For a much broader, and excellent,
account of trust in regulatory relationships, see V.Braithwaite and M. Levi (eds), Trust and Governance ().
© The Author.Journal of Law and Society © Cardiff University Law School
434 wileyonlinelibrary.com/journal/jols J.Law Soc. ;:–.
435
Two different models of regulation have been adopted for public services that have been
entrusted to delivery by the private sector.The first is that of regulation through contract, in which
the service is contracted out and performance is monitored by the contracting department. Here,
trust may be engendered through substantive commitments in the contracting process; contracts
provide calculable frameworks for future relations. The second model relies not on contracts to
cultivate trust but on the development of institutional and procedural arrangements. These may
include the use of regulatory agencies but are not limited to this form of institution, and may
also involve, for example, various forms of supervision by public bodies such as inspectorates.
The second model may differ dramatically from the first in that the emphasis is not on stability
and calculability but on flexibility and openness to different interests. Nevertheless, both involve
issues of trust, though in very different forms, as I describe below through analysis of two differ-
ent approaches to facilitating the development of trust and the institutional forms associated with
them.
I proceed through reference to two brief United Kingdom (UK) case studies, both involving
the use of contracts for the provision of public services by private providers, and both of which
failed badly. They are the provision of rail passenger services under franchise agreements and
the contracting out of much of the work of the probation services by the Coalition Government
in /. Of course, it cannot be claimed that these two examples are representative of all
contracting out of public services, let alone of all private provision of such services; the range of
different types of provision is huge. However,they are particularly important examples for two rea-
sons. First, they both involve a striking mix of value-for-money concerns and the need to protect
major social values; they are also situated within complex networks of regulatory relationships.
Second, however,contracts were used in very different ways in each case. In the case of rail, highly
stipulative provisions were used in an attempt to specify social requirements, whereas in the case
of probation, contracts permitted considerable discretion on the part of the private provider as
to how services were delivered. I suggest that the fact that both were unsuccessful illustrates the
fundamental weakness of the current regime of contracting out and its inability to instil effective
relationships of trust. This then provides the basis for the development of understandings of trust
in greater depth through an account of two different conceptions of it. I conclude by suggesting
alternative ways in which trust values can be institutionalized in an increasingly plural public
sector with varied types of provider. This will necessarily continue to rely on contracts, but in a
more developed and responsive institutional environment.
2TWO FAILURES OF TRUST
Turning to the two case studies, privatized UK railpassenger services were provided through fran-
chises, a form of private law contract, under the Railways Act . This can be considered quite
briefly as there is already detailed coverage elsewhere.Privatization of British Rail involvedsplit-
ting it into a large number of different companies, all linked contractually.Passenger services were
to be provided by (later ) private companies awarded a franchise to run particular groups of
services. In principle, franchises were to be awarded by competitivetender, though more recently
direct awards, often through the extension of existing franchises,have been common.
For the history, see T. Prosser, ‘The Privatisation of Britain’s Railways:Regulatory Failure or Legal Failure?’ ()
Current Legal Problems . For franchising,see T. Prosser and L. Butler, ‘Regulating a Fragmented Rail System in the UK’
() Modern Law Rev..
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