DfE ‘delivery model’ has changed since 2010: more outsourcing, less for LAs

Janet Downs's picture

There’s been a ‘notable change’ in the DfE’s ‘delivery model’ since 2010, says the Institute for Government*.  The academies programme has increased the amount of money spent via contracting and decreased grants to local authorities (LAs) for education.

The DfE is the third highest spending department in the financial year 2017/18.  Its overall spending was £96bn - £88bn went directly to education.

Since 2017, the government has attempted to introduce changes in all three ‘formula-based’ funding schemes – police, LAs and schools.  This has been challenging.

35% of DfE spending goes to ‘third-party providers’, that is academy trusts and free schools, the IfG revealed.   Outsourcing can bring benefits, the IfG noted.  John Manzoni, Permanent Secretary for the Cabinet Office since August 2015, cited research which promised savings arising from competition when he gave evidence to the Public Administration Committee.  But some of the evidence appeared to be ‘decades old’.  Other research cited ‘new ideas, greater flexibility and specialist skills’ as a benefit accruing from outsourcing.

But there are also ‘downsides’ to outsourcing.  Carillion’s collapse, for example, showed the risks of contracting out public services to third-party providers. (Author's comments: we have also seen how the academies system can result in public money being diverted into private pockets.)

Government has improved its contracting in recent years but it needs to go further, the IfG said.  A recent report by the institute found the ‘quality of government data on outsourcing and procurement to be poor’.  Improving this to develop a better understanding of what works and what doesn’t work in public sector outsourcing ‘would help the Government make better spending decisions.’


*Here and here.  


CORRECTION 23 January 2019 07.48.  The original article said John Manzoni was Permanent Secretary for the Cabinet Office in August 2015,  It should have said, 'since August 2015'.  This error has been corrected.

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Roger Titcombe's picture
Wed, 23/01/2019 - 13:41

With every month that passes, the evidence against outsourcing in all its forms, in all areas of public services, grows stronger and stronger.

"John Manzoni, Permanent Secretary for the Cabinet Office since August 2015, cited research which promised savings arising from competition when he gave evidence to the Public Administration Committee."

As noted by Janet, this evidence is not only old, but is increasingly discredited. The reasons are clear.

Competition and the profit motive always invoke perverse incentives against the public interest that result in worse service, poorer pay and conditions of service for employees, increasing numbers of 'exectives' replacing competent and experienced managers, head teachers etc and  astronomic pay increases for all senior staff with 'executive' in their job title. This almost always results in large increases in costs to the public. In the last year the cost increases have not been the worst of it. We have had the Grenfell Tower tragedy causing massive loss of life and homelessness (still ongoing), Carillion putting lives at risk through the disruption of NHS acute services in Liverpool and a shocking increase in suicides and self harm in prison institutions where conditions have deteriorated to appalling pre-Victorian levels of squalor.

Before anyone comments that some public sector organisations have also performed badly, it must be pointed out that outsoucing also damages the service standards and staff working conditions in the remaining public services because of the pressures placed upon them to 'ape' the commercial culture of the outsoucing companies. In Education, the School Meals and Cleaning services come to mind. It must also be pointed out that Labour LAs have often been just as keen 'outsourcers' as Conservative ones.

I have listed only a small number of outsourcing disasters. There are hundreds more that could be added. My local pet gripe relates to the Highways Agency (a useless public sector body contaminated by the commercial culture) outsoucing of the A590 trunk road to Kier Construction. The A590 is the vital link to the M6 from Barrow in Furness and the Furness peninsula.

I have been complaining to The Highways Agency, my MP and local councillors for the last three years about the daylight burning of A590 carriageway lights. KIer Construction told me on one occasion that they did not understanding the computer software that controls the switching on and off of the lights! There are now even more daylight burning lights than there were three years ago. This never happened when Cumbria County Council managed the A590.

In education marketisation, outsoucing, Academisation and competition have been utterly disastrous with the negative consequences 'covered up' by the DfE and OfSTED, the puppet inspection authority. Most of my articles refer to these issues and Janet does a great job exposing the lies and the cover-ups.

This article of mine is a good place to start for an understanding of what is going on and the ideological forces driving it.

Janet Downs's picture
Wed, 23/01/2019 - 14:03

Kier seems to be going through a rocky period at the moment after its CEO was ousted yesterday following a 'rights issue debacle'.  

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