Ethical Commercialism

Reforming the public service market

Work in progress

Ethical Commercialism

Public private partnering used to be an industry hidden in plain sight. Not anymore. Billions of pounds of public money spent, a variable record of delivery, questionable corporate governance and unpopular executive pay all increasingly make the public service market a common concern.

So when companies and contracts fail not only is there a crisis of service delivery, but a crisis of the very quality and nature of the market itself. For government this is increasingly a political problem. Recent corporate collapses, such as that of Carillion, expose fundamental tensions between public and private which must be addressed. An efficient and effective public service market is possible, good practice exists and new models could be shared more widely, but only with radical reform.

Research conducted by Localis in late 2016 points to a sense of apathy with private sector involvement in public services on the part of council workers. In recent years the market in public services has become decreasingly competitive in response. As councils have sought secure savings at the expense of creativity the market has tilted in favour of large oligopolistic firms.

A divide has emerged with a small cadre of firms hoovering up a wide variety of contracts and a growing pool of other, still significantly sized organisations, defending their existing contracts and struggling to maintain profitability as revenue’s decline. As a set of market conditions this is more than undesirable, it is dangerous. Reforming the public service market is in the interests of both private and public sectors.

We are beginning this research project to explore how new organisations, new models and approaches are needed and articulate the case for changing corporate culture. The research is looking at arguments for an ethical approach to commercialisation in public services. It will make recommendations to government regarding the improvement of the public service market to help it bring to life its mission to reform the way businesses see their role in, and responsibility toward, society.

The research project will focus on three areas:

  • State of the market. How has the private contracting market grown and shifted in the past few decades? Which public service lines and firms are most vulnerable if a more efficient and productive market for public services isn’t created? What are the typical governance structures of private contracting companies?
  • Principles of a reformed public service market. What is the relationship between new models of service delivery and debt? Can a new language be crafted that better explains the nature of public private collaboration? What does ethical commercialism look like?
  • Who is responsible for delivering ethical commercialism? What can Treasury and the Cabinet Office do to support a more productive and efficient public service market? What can local authorities do? And what is the role of the market?



For more information on this research project please get in touch with