Index

Author:
Nina Boeger
Publication Date:
19 Jul 2024
Pages:
189–194
DOI:
https://doi.org/10.51952/9781529212877.bm001
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Compelling and robust, this book provides an analysis of challenges in public service outsourcing and considers how to avoid failure in the future. Crucially, it proposes a governance mechanism where outsourcing public services nurtures less extractive and more sustainable corporate organizations that are oriented towards a productive purpose beyond maximizing shareholder value, with implications well beyond public services. Under these proposals, supporting firms that are independently and inclusively governed and use profit to pursue purpose can improve both public services and wider economic organisation. The book examines how barriers to implementing this idea within the existing legal framework for public procurement may be addressed, and it formulates actionable policy proposals.

References to notes show both the page number and the note number (123n3).

A

accountability
about 21
public contracts, in 4, 20–21, 66, 70, 77–78
regulation to ensure 80, 83–85
state 39
sustainable corporate ownership and 102, 124–125, 131, 143–144, 167
acquisitions 52, 55–56, 93, 138
Agreement on Government Procurement (WTO) 5
Amazon 9
ancillary objectives see secondary objectives
Anglian Water 113–114

B

B Corp certification 17, 115–117, 120, 129, 129n46, 131, 150, 155
behaviour (of public service providers) see public services
beneficiary rights
about 10–11, 98, 109
sustainable corporate ownership 12, 17, 101, 114, 161, 187
benefit corporations 17, 83, 118, 120, 150, 156
boards of directors 122–123, 130–131, 138, 145–146
Brexit 1–2, 5

C

Carillion 52, 53–54, 53n24
certified B Corps see B Corp certification
codes see corporate governance codes
community enterprises see VCSEs
community interest companies 17, 83, 110, 115–116, 120–121, 127, 131–132
conflicting incentives 39–40
conflicts 58, 62, 63, 82, 97, 143–144, 146
conflicts of interest 4
contingencies 37–38, 43
contractors see private contractors
contracts see public contracts
control rights
about 11, 98
sustainable corporate ownership and 12, 17, 131, 161, 187
vesting of 122, 123–125, 129, 145–146, 148
Cooperatives UK 166, 183
corporate governance 50–55, 122, 124, 142–143
corporate governance codes 53–54
corporate ownership
about 11–12, 96–101
challenges with 142–145
see also corporate purpose ; private contractors ; shareholders ; sustainable corporate ownership
corporate purpose
challenges with 112
commitments, purpose 113–115
options for 110–111
purpose-driven design 150–153, 155
see also B Corp certification ; benefit corporations
COVID-19 pandemic 4, 19, 47, 48, 75, 84, 88
Crown Commercial Service 34–35, 106

D

Deloitte 48

E

economic rights
about 11, 98
sustainable corporate ownership and 12, 17, 102, 128, 133–134, 161, 187
efficiencies 23, 24–25, 28, 41–42, 51, 73–74
employee-owned organizations 127–128, 137, 146, 157n47, 176, 183
see also mutually-owned organizations
European Union (EU), public procurement legislation 2, 5, 6, 28–29, 178n33

F

Financial Conduct Authority (FCA) 139–140
financial crisis (2008) 20, 142–143
financialization 8, 12–13, 17, 141–146, 149–151
foundation-owned firms 17, 107, 137–139, 137n67, 148–149, 154
Four Seasons Health Care 55–56
Fujitsu 8

G

Germany 149
governance see corporate governance
governance rights 99, 101–102, 123
Goyder, Mark 85–86

H

healthcare
challenges in 4
models of 19
quality, regulation of 174–175
reserved contracts and 173–174
state responsibility for 19–20
hedge fund shareholdings 8, 51–52, 56
House of Lords 7–8, 12, 13

I

incentives see conflicting incentives
in-house delivery (of public services) see insourcing
insourcing
about 20–21, 23–24
benefits of 89–90
challenges with 90–93
types of 93–96
see also outsourcing ; re-internalization of services
Institute for Government (UK) 3, 66n19, 91
institutional memory 45–46
intervention rights 11, 125

J

John Lewis Partnership 128–129, 146, 148

K

key performance indicators (KPIs) 3, 59–60, 59n1, 73

L

‘light touch’ regime 5–6, 56, 59n1, 83–84, 102–103, 103n27, 121, 127, 164, 169, 172

M

management of contracts see public contracts
markets 66–75
mutually-owned organizations 125–129, 126n36, 127n40, 132–133, 136–137, 146–148, 155

N

National Audit Office 48, 69, 78–79, 78n48
national procurement policy statement 5, 33, 34–35, 160, 162–163, 181, 182
Nationwide Building Society 148
non-profit organizations 13–14, 103, 103n27, 111, 113, 126–127, 133–136, 173n20
see also VCSEs

O

objectives see primary objectives ; secondary objectives
OECD 32
offshore companies 8–9
Organisation for Economic Co-operation and Development (OECD) 32
outcome-based contracts see public contracts
outsourcing
about 20, 23–24
benefits of 15, 22–23
concerns with 14–15, 43–46
efficiencies 23, 24–25, 28, 41–42, 51, 73–74
history of in Britain 2–3
information, access to 45–46
path dependencies 45, 90–91
sustainable ownership, focus on 153–154
see also private contractors ; public procurement ; re-internalization of services ; SMEs ; strategic suppliers
overseas companies see offshore companies
oversight see regulatory oversight
ownership
about 10, 98
see also corporate ownership ; insourcing ; outsourcing ; sustainable corporate ownership

P

pandemic see COVID-19 pandemic
Patagonia 107, 137n67
path dependencies 45, 90–91
pay see salary cuts
policy statement see national procurement policy statement
Post Office 8
primary objectives 1, 15–16, 19–25, 89, 96
see also secondary objectives
private contractors
accountability of 4
behaviour of 32, 55, 61, 67, 75, 80–81
collapse of 52–53, 55–56
concerns with 3, 7–9
role of 39–40
sustainability reports 32–33
see also corporate governance ; SMEs ; strategic suppliers
private ownership see corporate ownership ; sustainable corporate ownership
privatization 2–3, 22, 44–45, 90, 94, 127
procurement policy statement see national procurement policy statement
profit
about 133–134
distribution of 133–135, 139–140
purpose-driven design and 151–152, 155
reinvestment of 148
see also shareholders
profit-constrained organizations see non-profit organizations
providers see private contractors
public administration 20, 21, 67
public benefit company 14, 83–84, 95–96, 118–119, 120
public contracts
accountability in 4, 20–21, 66, 70, 77–78
challenges with 37–45, 73–75
governance tool, as 58–65, 66–67
institutional memory and 45–46
key performance indicators (KPIs) 3, 59–60, 59n1, 73
management of 65–66, 73–74
outcome-based 63–65
private ownership, and 96–98, 143–144
purpose, prioritization of 111–115
relational 61–63, 67, 81, 97, 125
reserved 169–174
secondary (ancillary) objectives 15–16, 25–29
VCSEs 103–108
see also primary objectives ; regulatory oversight ; secondary objectives ; social value ; strategic suppliers
public ownership see insourcing
public procurement
about 20
policy, and sustainable corporate ownership 160–168, 176–180
policy-led 25–30
re-tendering 66–67
tendering 23, 32–33, 60, 73–74
see also public contracts
public procurement legislation
about 1–2, 5, 6–7
concerns with 7–9
national procurement policy statements 5, 33, 34–35, 160, 162–163, 181, 182
non-disclosure protection in 44
quality and 174–175, 177, 179
recommendations 4
requirements in 59, 59n1, 68–69, 70–72
on secondary (ancillary) objectives 27–29
social value 29, 30–34, 156, 158–159, 162–163, 166–167, 180–185
sustainable corporate ownership and 161–162
see also ‘light touch’ regime
public services
about 19
behaviour of providers 32, 55, 61, 67, 75, 80–81
delivery of 20–25
sector, erosion of the 44–45, 47
see also insourcing ; outsourcing ; privatization ; public procurement ; re-internalization of services
purpose see corporate purpose

Q

quality 174–180

R

regulatory oversight
about 75
centralization of 80–81, 82–84
challenges with 78–81
ex ante licensing 76
inspections 76, 77–78
public procurement policy and 167–168
strategic suppliers, of 84–86
re-internalization of services
challenges with 44–45, 46–47
factors influencing 90–93
reasons for 61, 87–89
see also insourcing ; outsourcing
relational contracts see public contracts
reserved contracts see public contracts
re-tendering see public procurement
returns see profit
rights see beneficiary rights ; control rights ; economic rights ; governance rights ; intervention rights
risk transfer 60

S

salary cuts 3
savings 3
secondary objectives 15–16, 25–35, 74, 89, 101, 184, 187–188
see also primary objectives
Serco 47–48, 110, 110n3
service delivery 20–25
see also insourcing ; outsourcing ; public procurement ; re-internalization of services
service providers see private contractors
shareholders
control rights 99, 122–123
interests of, prioritization of 11, 51–52, 53, 54–55, 99–100, 109, 143
small and medium-sized enterprises see SMEs
SMEs 6–7, 33–35, 60, 70–75, 71n32, 104–105, 170, 184
see also private contractors
social enterprises see VCSEs
social value 29, 30–34, 101, 156, 158–159, 162–163, 166–167, 180–185
société à mission 150–151
Southern Cross 55–56
stakeholders
boards, representation on 130–131
control rights 123–125, 129, 147, 148
engagement of 176
interests of 54, 101–102, 109, 115–116, 118
shareholders, compared to 99, 123
see also employee-owned organizations ; mutually-owned organizations
statements see national procurement policy statement
strategic suppliers
about 42–43, 42n9, 43n10, 52, 84
Carillion 52, 53–54, 53n24
Serco 47–48, 110, 110n3
sustainability see social value
sustainability reports 32–33
sustainable corporate ownership
about 101, 187
accountability in 102, 124–125, 131, 143–144, 167
benefits of 102–103, 144–145
investment in 155–159, 157n47
public procurement policy and 160–168
quality and 176–180
reserved contracts and 171–174
transition to 149–154
see also B Corp certification ; benefit corporations ; community interest companies ; employee-owned organizations ; foundation-owned firms ; mutually-owned organizations ; non-profit organizations ; social value

T

tagging scandal see Serco
tax abuse 9–10
tendering process see public procurement
Terra Firma 9
Thames Water 118–119
third sector see VCSEs
Trade and Cooperation Agreement 5
transparency 1, 23, 27, 44, 46, 67–70, 73, 84, 163, 166
Transparency International UK 74–75
trusts see foundation-owned firms

U

Unison 95–96
United States
benefit corporations 118, 150
healthcare 19
policy-led public procurement 26
profit distribution constraints in 135

V

VCSEs
about 35–36
public contracts and 103–108, 120, 135–136
public procurement policy and 142, 159, 165–167, 186–187
reserved contracts 169–170
social value and 183–184
see also employee-owned organizations ; mutually-owned organizations
voluntary, community and social enterprises see VCSEs

W

Welsh Water 113–114, 132–133
worker-owned organizations see employee-owned organizations
working conditions 3, 146
World Trade Organization Agreement on Government Procurement 5

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