The Impact of Compulsory Competition on Public Sector Management: 'Competition Within the Field'
| Date | 01 March 1990 |
| Published date | 01 March 1990 |
| Author | Norman Flynn |
| DOI | 10.1177/095207679000500104 |
| Subject Matter | Articles |
33
The
Impact
of
Compulsory
Competition
on
Public
Sector
Management:
’Competition
Within
the
Field’
Norman
Flynn,
London
Business
School
[This
article
is
based
on
a
paper
presented
at
the
Royal
Institute
of
Public
Administration
Annual
Conference,
University
of
Kent,
September
1988]
COMPULSORY
COMPETITION
While
there
has
been
a
tradition
of
sealed
tenders
for
contracts
for
public
works
from
the
nineteenth
century,
the
post
war
period
saw
an
expansion
of
the
use
of
directly
employed
labour
on
building
and
road
works.
By
the
middle
of
the
1970s
there
were
scandals
involving
cost
overruns
on
several
local
authority
housing
schemes.
In
1978
the
Labour
government
proposed
that
local
authority
building
departments
should
run
trading
accounts
as
a
first
step
towards
exposing
costs
and
encouraging
competition.
The
Local
Government
Planning
and
Land
Act
1980
and
the
Local
Government
Act
1988
made
competitive
tendering
compulsory
in
a
range
of
services
provided
by
manual
workers
and
the
management
of
leisure
facilities.
A
consultation
paper
has
suggested
that
a
much
wider
range
of
services
could
be
included.
In
the
National
Health
Service,
the
same
approach
has
been
pursued
by
the
government
by
Circular,
rather
than
legislation:
a
circular
issued
in
1983
called
on
Health
Authorities
to
subject
their
’hotel’
services
(cleaning
and
catering)
to
tendering.
Central
government
has
made
wider
use
of
contractors
since
manpower
targets
called
for
a
reduction
in
the
number
of
people
directly
employed
by
central
government.
It
was
easy
to
achieve
these
targets
by
transferring
work
to
contractors.
In
addition
to
the
use
of
formal
competitive
tendering
with
contractors,
there
has
been
a
growth
in
the
use
of
agreements
which
are
akin
to
contracts
which
may
produce
results
similar
to
those
of
compulsory
competition.
However,
by
1986/87
only
7.3%
of
the
total
of
civil
service,
NHS
and
local
government
expenditure
had
been
subjected
to
mandatory
market
testing
(Confederation
of
British
Industry
1988).
Relatively
simple
rules
are
laid
down
for
competition
in
local
authorities.
Advertisements
have
to
be
published
of
the
intention
to
subject
work
to
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