Business

CBI: Outsourcing could save government £23bn

  • 24 September 2012
  • From the section Business
A dinner lady in Coventry
The CBI says provision of meals should be outsourced by more schools

The government could save £22.6bn by outsourcing more public sector services, the CBI has said.

A report commissioned by the employers' organisation claimed the savings could be made without hurting quality, by opening more services up to private sector competition.

The research by Oxford Economics extrapolated from £2bn of savings it identified in a sample of 20 services.

The "Open Access" report claimed an average cost saving of 11%.

"Most public services are still state monopolised and it's time to open some of the to competition," said the CBI director general, John Cridland.

"Take school dinners - is it really necessary for three-quarters of all our schools to be worrying about catering?"

The report also claimed that 98% of the management of social housing, and 86% of prison management, was still being provided by the public sector instead of being contracted out to private sector firms.

The government published a white paper on opening up public services last year.

"Improving public service delivery has been a coalition priority since day one," said a spokesman for the cabinet office.

"We have recently made a number of senior appointments, who all have significant commercial experience, to reform the way we deliver services and provide value for money for the taxpayer."

The spokesman said that as well as outsourcing to the private sector, the government was also sponsoring the creation of employee-owned mutuals to run public services, such as in the case of the Post Office.

Dave Prentis, general secretary of Unison, the largest public sector workers' union, was sceptical about the report, claiming its figures had been "plucked from thin air".

"Only last week, MPs felt it necessary to call for a blacklist of firms that have failed to deliver on their contracts," he said, noting in particular the failure of G4S to meet its contractual obligations to provide security for the Olympics.

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