Ministers told to open the public sector up to competition

Published on Tuesday 1 September 2009 19:57

SCOTTISH ministers must either open up schools and hospitals to competition or face having to cut back services in the coming budget squeeze, Edinburgh's Chamber of Commerce has claimed.

The business group will mount a campaign this week to demand immediate reform, warning that an overhaul of the public sector is now necessary, as cuts of as much as 4billion a year head Scotland's way.

It claims the coming cutbacks should be used as an opportunity to end the public-sector monopoly over public services, which, it claims, would ensure that Scots got a better service for less cost.

Writing in The Scotsman today, Ron Hewitt, chief executive of Edinburgh Chamber of Commerce, says that, despite the claims the worst of the recession is over, "only by a radical overhaul of state-sector productivity can we avoid a protracted economic hangover".

Mr Hewitt adds: "Scotland is almost unique in the developed world in that public services are generally delivered by publicly owned monopolies. This is a recipe for inefficiency.

"If hospitals and schools must compete for custom, they would be driven by the same financial incentives that inspire the business sector.

He goes on: "Government can still guarantee the bills, ensuring access for all."

The call comes as one of the country's main financial watchdogs, the Chartered Institute of Public Finance and Accountancy, attacked the Scottish Government for failing to seize the moment to reform the public sector.

Angela Scott, head of CIPFA Scotland, criticised the current public services reform bill, warning that it "represents a missed opportunity when far-reaching reform could have been achieved".