Government relaxes compulsory competitive tendering rules

To the delight of the Trades Union Congress (TUC), the UK Government announced on 3 June 1997 that rules compelling local councils to open their services to outside competition are to be scrapped.

Compulsory competitive tendering (CCT) was one of the key privatisation measures introduced into the public sector by the Conservative governments of 1979-97, coming into effect 17 years ago for "blue-collar" services and four years ago for "white-collar" services. The argument behind it was that greater competition would induce greater efficiency and hence savings in public expenditure. The Labour Government, however, believes that compulsion in itself is not the best method and should instead be replaced by a promise to provide "best value" for money.

It is thought that the new rules will be introduced after the summer.Hilary Armstrong, the local government minister, has announced that she will be consulting council leaders over the best way to achieve this aim, seeking to develop best practice rather than impose a rigid formula. The Government will, it is expected, first run a few pilot schemes to test the "best value" theory before putting it into action. The hope is that it will promote continuous improvement in service and quality. The Government is said to have an open mind as to whether services will be provided by private or public sector organisations, but insists on seeking an "effective partnership and fair competition".

The TUC welcomed the government proposals, in particular the step-by-step abolition of the compulsory element. According to the TUC general secretary, John Monks:"This is a clear recognition that CCT has failed. Its market-driven approach has failed to deliver improvements in service quality and has driven down pay and conditions for public sector workers."

The TUC says that it looks forward to taking part in the consultation process and will be working constructively with the Government to develop the "best value" model of public services. The TUC feels that the government proposals are based on a completely different approach, which values high-quality service and employment rather than the vagaries of the market as sole determinants of producers or providers of services.