It used to be quite simple. Government needed things done. Private companies would bid for contracts to do it. The competition was fair and open. The best and cheapest would win.

But now, Britain's burgeoning public sector has spawned scores of quangos. And these bodies have started tendering - to the same government departments that sponsor them and give them their core funding - against private companies for these same contracts.

It's a moot point whether a competition can ever be 'open' when one side is actually part of the organization that is making the choice. But it certainly cannot be 'fair' when one side gets core funding from the state. For then it does not need to put its overhead costs into a bid. And knows the government will underwrite any losses it makes. So there's no surprise that private suppliers are finding they can't win today's tender contests.

For the sponsoring department, this is great, because you can tell the Treasury you are saving money on contractors - even though you are doling out millions to the quangos behind the scenes. And since, in desperation, the private companies are rushing to form consortia with the quangos that win all the work, you can proudly boast how you have advanced the 'public-private partnership' agenda too.

But: fair and open? Best and cheapest? I don't think so.