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OFT examines public sector procurement

22 December 2010

The Office of Fair Trading is to study commissioning and competition in the provision of public services to realise better value for money.

The study's objective is to provide constructive and practical guidance to policymakers and commissioners of public services in local, central and devolved government on how to take due account of competition issues in the procurement of public services.
It will look at commissioning across a range of public services including health, education, welfare and justice, to identify examples of best practice of competitive procurement and to consider the impact of related issues such as payment by results, the role of small and medium sized enterprises and the third sector, and delivery through the mutual model. Where possible, the OFT will also draw parallels with examples of competitive commissioning of private services and will make international comparisons.
The study builds on recent work by the OFT examining the role of government in markets. As set out in its current Annual Plan, a key theme for the OFT in the coming year will be the government's role as a buyer, seller and market maker. To reflect this greater focus on the public services sector, the OFT has established a new group looking at public markets.
Sonya Branch, Senior Director of Services and Public Markets, said: 'By collecting evidence on the impact of specific purchasing practices, our aim is to help policymakers and procurers preserve and promote competition in public services markets. Used in the right places and in the right way, vigorous competition among public services providers can increase efficiency, improve the quality and range of services on offer, and achieve a better allocation of resources. In the long-term it can also lead to greater innovation, and substantial savings for the taxpayer.'
The OFT plans to publish its report in March 2011.


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