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Report

Report

Where opening up services can save the public money

9 areas where there is scope for public/private co-operation to make services more efficient. Select the icons for more information

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  • OPEN School
    Improvement Services     12%
  • OPEN Prisons 14%
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  • OPEN Local Government Transactional Finance Services 20%
  • OPEN Schools Catering 27%
  • OPEN Hospital Facilities Management 29%
  • OPEN Police Fleet Management 40%
  • Business Issues

    Public Services

    Public services touch the lives of everyone in society – and businesses have a major role to play as users, funders and suppliers in improving these services to meet the needs of UK citizens.

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  • Press Release

    Action now to open up more public services to competition could save £22.6bn

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  • OPEN Waste Management 47%
  • OPEN Offender Tagging and Monitoring 100%
Report

Where opening up services can save the public money

9 areas where there is scope for public/private co-operation to make services more efficient.

Read the full report
Back to services

Social Housing in-depth

2%

Local authorities and registered social landlords spend £4.6bn a year managing the UK's social housing.

Less than 2% of social housing by market value is managed by independent providers. The research identified savings of 15% where they are managed by independent providers. If all social housing management was open to competition, potential further savings of up to £680m could be achieved.

£675m

Potential productivity savings from opening up social housing management to competition

£4.6bn

Cost of managing the UK's 5.3m social housing units

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Waste Management In-depth

47%

UK local authorities spend around £2.4bn a year on domestic waste and recycling collection, disposal, and street cleaning.

This is currently split between in-house public providers (53%) and out-sourced independent sector providers (47%). Based on an estimate of 15% savings from productivity improvements, if the whole market was open, cost savings of £190m could be achieved.

£190m

Identified potential savings from improved productivity in waste management

£2.4bn

The annual cost of domestic waste collection and street cleaning

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Prisons In-depth

14%

There are 16 independently operated prisons in the UK, with eight more in the process of being tendered.

Total prisons expenditure in 2011 was £2.7bn, of which about £370m was on privately run prisons - a market share for independent providers of 14%. Based on a conservative estimate of cost savings, the Government could save up to £240m through opening the prison estate to competition.

£240m

Potential savings from fully opening up the whole prison estate

£2.7bn

Total spending each year on prisons estate

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Hospital Facilities Management In-depth

29%

Hospitals in the UK spend more than £7.3bn a year on 'hard' services such as estate and building management and 'soft' services such as catering, cleaning and security.

Nearly a third of these services are outsourced to independent sector providers, while £5.2bn of spend is in-house. Information from CBI members and other sources suggests cost efficiencies of up to 10% on new contracts - opening up all FM services to new providers could lead to savings of around £517m.

£517m

Potential savings if all remaining in-house FM services were opened up to competition

£7.3bn

Spent on 'hard' and 'soft' FM by the NHS each year

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Schools Catering In-depth

27%

It costs schools in the UK £1bn a year to provide meals for pupils.

Nearly three quarters of these services are still maintained in the public sector. Just over a quarter of schools in England use private contractors to provide catering. Evidence suggests savings of 5% per meal are common when catering is opened up to new providers.

5%

Potential savings if all remaining in-house FM services were opened up to competition

£1bn

Annual cost of school meals provision in UK state schools

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Offender Tagging and Monitoring In-depth

100%

These services are fully open to independent provision.

In the UK (excluding Northern Ireland) they cost £150m a year and are completely delivered by independent sector providers. At the last re-tender, the Home Office negotiated a 40% reduction in the value of the contract, equivalent to a saving of £100m per year based on the current value of contracts.

£100m

Annual savings from independent provision of electronic tagging achieved during the last contract renegotiation

£150m

Annual cost of the electronic tagging and monitoring of offenders

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Police Fleet Management In-depth

40%

Police forces spend approximately £120m a year managing their vehicles.

Of this, 40% is estimated to be on contracts with independent providers. If all forces adopted this open market approach, savings of around 10% (around £7m) would be achievable.

£7m

Savings on police fleet management if all forces achieved 10% savings through better productivity, seen in forces where services are managed by independent providers

£120m

Amount UK police spend each year on running their fleet vehicles

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School Improvement Services In-depth

12%

UK schools spend more than £600m on education consultancy services and more than £200m on workforce training and development every year; 88% of these services are provided by the public sector.

With predicted efficiencies from outsourced services of between 10 and 15%, savings of at least £93m would be likely through opening up these services to a full range of diverse providers.

£93m

Likely productivity savings from a fully open market in workforce development and education consultancy

£800m

Spend by UK schools on workforce development and education consultancy

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Local Government Transactional Finance Services In-depth

20%

Back office services such as finance and HR are a core running cost of any council.

Local authorities in the UK spend about £330m a year on them - much of it in-house. Specialist providers account for less than a third of these services, but evidence suggests that councils can both reduce costs and improve performance here. Additional cost savings of £50m are possible through more open competition.

£70m

Potential savings in the management of selected back-office functions

£500m

Annual spend by councils on transactional, finance and HR services

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