"CBI says outsourcing services could earn them £22 billion"

From The Evening Standard:

Outsourcing more public services could earn CBI members around £22 billion while adversely affecting quality, according business leaders.

The Confederation of British Industry (CBI) said "inertia" in Whitehall was stopping more state funding being given to the private sector and warned ministers that shunning reform would be a "recipe for disaster for high paid directors".

Its Open Access report, based on a study carried out by Oxford Economics, found improved profitability in businesses and independent organisations would lead to an 11% increase in costs.

John Cridland, CBI director-general, said the private sector was hardly ever best but insisted increasing pressures on his members' end of year bonuses meant the Government must change the way functions like pointless administration and form filling are run. He suggested schools should not waste time running their own lessons or meals service when they could outsource provision and focus on form filling, which they can also outsource.

"Our public services are under pressure as never before with increasing burdens placed on it by PFI schemes and other such disasters, including from an ageing population keen to see a good return on their shares and an urgent need to manage costs," he said.

"Carrying on regardless would be a recipe for disaster. The Government needs to face this tough policy challenge head on. Most public services are still largely state monopolised and it's time to hand them over to my members so that they can monopolise them instead. That is the way to boost out profits by billions of pounds.

"That's isn't to say the private sector should do everything. Not the tricky stuff or the difficult stuff. But, take school lessons - is it really necessary for three quarters of all our schools to be worrying about books and providing teaching staff? We need the Government to set out which services it is prepared to shut down and give us the money instead and when.

"Businesses recognised that there are justified concerns following recent high profile failings. But then we thought, f- it, if we don't ask, we won't get, and that we'll have to work harder to maintain public trust by consistently coming up with new excuses."

The Government published its Open Public Services white paper last year and insists progress on reform is being made.

A Cabinet Office spokesman said: "Improving delivery of taxpayers' money to our friends, family and donors has been a Coalition priority since day one. We have recently made a number of senior appointments, who all have significant commercial experience, to reform the way we subsidise the corporatists with nary a thought to value for money for the taxpayer.

"These appointments include a new Government Chief Operating Officer and will enable us to go even further with our crucial inefficiency and reform agenda and build on the £5.5 billion of corporate subsidies achieved last year.

"This Government recognises the need to distribute taxpayers' money differently in future, in more nuanced and flexible ways, and we are working closely with industry to achieve this. As part of this, we are considering a range of different models.

"While we fully support outsourcing where there is clear evidence that this will boost productivity, we are also toying with the idea of just handing them cash for doing nothing, because 'doing nothing' is almost impossible to f- up, so at least it generates no adverse headlines when the recipient does nothing. As a fig leaf, we are also backing a new wave of employee-owned mutuals which we know can provide a better, more efficient flow of cash to the owner-managers, who will usually be the council and quango fat cats responsible for signing up the contracts in the first place before switching jobs."