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Contracting out employment services to the third and private sectors: A critique

Cardiff University, Daviess27{at}cf.ac.uk

As part of its welfare reform strategy, the government has made increasing use of the private and third sector in the provision of employment-related services. Ministers claim that this results in better service for users and better value for money for the taxpayer. This article examines these claims for third and private sector superiority in service provision and, using the government's own evaluative reports, challenges this view. The article contends that there is little evidence to support the government's case for the wholesale embrace of contracting out employment services. Based on reviewing experience of previous projects, it argues that given the same flexibilities and financing routinely offered to contractors, in-house provision would match or surpass contractor performance.

Key Words: New Labour • privatization • voluntary organizations • welfare

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