The Challenge of Competition

This report comprises the edited proceedings of an important conference on the subject of local authority tendering, held under the sponsorship of the Adam Smith Institute at the end of 1986. At that time, the government had announced proposals to make it compulsory for local authorities to invite tenders for several services; though in the event, these proposals were postponed. Nevertheless, there is little doubt that the principle of compulsory tendering will soon be revived.

Even without official prompting, more and more local authorities are turning to contractors to perform their essential services. The teething troubles that are inevitable when any new market is established, have largely been overcome by those authorities and contractors with the longest experience in the field. Some of their wisdom, showing how they have defeated the problems and captured the benefits of privatization, is distilled in this report.

The savings that ratepayers have enjoyed because of contracting our undoubtedly run into hundreds of thousands of pounds; and as the contributors to this report argue, service quality has been improved at the same time. There is a general acknowledgement that public institutions have an obligation to provide the best service at the lowest price for those whom they represent. These papers illustrate one way of achieving that laudable aim.

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