Managing in a 'quasi'- market: using cost structure information to provide insights from recent history.

Richard Tonge, Fiona Brocklehurst, Caroline Willett, N. Carline

    Research output: Contribution to journalArticlepeer-review


    1979 is regarded as a watershed in the way that public services operate. It was characterised by the setting of limits to the involvement of the state, placing the emphasis on public service provision and the role expected of its management. In the specific context of local government, the drive for efficient, customer-orientated services meant focusing on the pursuit of 'value-for-money' (VFM) and it was intended that this would take a variety of forms: changes to the sources of funding and controls over expenditure were accompanied by compulsory competitive tendering (CCT) and the deregulation of activities to encourage private sector competition. The implementation of such a policy was highly political, and very quickly gave rise to research examining its success or failure. Over a near thirty year period, a wealth of studies has been published on the effects of tendering and contracting out of service provision, and the level of efficiency gains achieved. However, resultant evidence has been ambivalent on success or failure, and has also focused primarily on the local authority as the provider of the service. An area that has been relatively starved of equivalent research has been the impact on those DLOs which have continued to trade and survive in the medium to long-term. This research paper is an attempt to begin the rectification of that imbalance as it focuses on: • evidence as it relates to the DLO (agent) rather than the local authority (principal). • the response of DLOs/DSOs to the introduction of a 'quasi- market' as discerned through an examination of their costs structures. • the extent to which other external factors such as party political control or geographical location accentuate or ameliorate the impact on the DLOs / DSOs cost structures either through or alongside the market. The findings, by their very nature, provide issues for management to reflect on, for policy making and for consideration in the context of the most recent Gershon efficiency agenda.
    Original languageEnglish
    Pages (from-to)47-60
    Number of pages14
    JournalJournal of Finance and Management in Public Services
    Issue number2
    Publication statusPublished - 2007


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