Bound For Botany Bay: Contracting for quality public services

Gary Sturgess, August 2005

A contracting fable 

 

Over a period of eighty years, somewhere around 160,000 British and Irish convicts were transported to the Australian colonies, almost all of them in ships owned and operated by private contractors.

In The Fatal Shore, the classic study of Australia’s convict system, Robert Hughes was highly critical of this system of contracting. According to Hughes, the First Fleet of convicts sent to New South Wales in 1787 was ‘a government affair from start to finish’.

The results were ‘muddled and potentially disastrous’, but they were much better than they would have been under private contract. Excluding an outbreak of typhus before the ships left port, 45 convicts and children died in the course of that initial voyage, a death rate of around 3%.

By contrast, with the Second Fleet – according to Hughes, the first of the contracted voyages – 267 convicts died at sea and another 150 upon arrival, a death rate of more than 40%. One of the survivors recalled that the convicts were confined in the hold for the entire journey and ‘were scarcely allowed sufficient quantity of victuals to keep us alive’.

For the ideological opponents of contracting, the lessons of Hughes’ comparison are obvious: the private sector cannot be trusted with the delivery of core public services. But in fact, Hughes was mistaken. Both fleets were contractor-operated.

As it turns out, the difference between a death rate of 3% and a death rate of 40% lies not in who delivers the service but in the design of the contract – the evaluation criteria, the performance regime, and the manner in which the contract is managed.

Download the full article
A contracting fable that shows it is the design of the contract that matters for successful delivery – in the evaluation criteria, the performance regime, and the manner in which the contract is managed.

Related articles

The Structure and Future of the UK Public Services Market

The public service industry in the UK – that part of the market made up of non- government suppliers – accounts for almost 6 percent of GDP and employs some 1.2 million people. However, virtually nothing is known of the supply side of this market.
4th December 2012

Integrated Commissioning: Building a better model for the delivery of social value through diverse networks of local providers

Decentralisation has been identified as an important key to unlock more productive and responsive public services. The closer the services are to service users, the more accountable they are for addressing users’ diverse and individual needs. As such, increasing the impact of public services means devolving control and providing more choice.
30th June 2012

Frugal Innovation: Learning from social entrepreneurs in India

Over the last 60 years, innovation and improvements in India's public services have frequently emerged in the absence of state intervention or involvement. Social enterprises have stepped in to address the challenges where the government has failed.
29th February 2012