33. The Government's lack of evidence about when and whether using the private sector or voluntary sector will be more successful than using the public sector underpins this lack of a structured business case. Nick Davies told us that, while evidence on buying goods was unambiguous, on purchasing services it was "a lot patchier".78 Margaret Stephens told us that "there is a case for gathering much more evidence to inform better decision-making."79 The union UNISON complained about a "lack of hard data".80 Professor Sturgess noted that, while some research had been done on the merits of purchasing goods or services externally, it was "nowhere near enough".81
34. Professor Sturgess told us that, given the complexity of each decision about purchasing services, more work should be done in evaluating case studies of contracting.82 In the Government's manual for handling money, Managing Public Money, it endorses the principle that programmes should have evaluations designed into them at the start.83 There are examples of evaluations within central government that examine novel procurement structures. For example, the Department for Work and Pensions commissioned an evaluation of the Work Programme in 2014 which pointed out that incentives to help the hardest-to-help claimants had "a limited impact in driving provider behaviour."84
35. Professor Sturgess recommended that, in addition to evaluations published by departments, the Government should consider the "establishment of a centre of excellence for the study of applied public service contracting, and the design and operation of public service markets."85 In other areas, the Government has established what it calls "What Works Centres": these currently focus on issues like educational attainment or local economic growth.86
36. The Government must produce evidence about the advantages and disadvantages of purchasing from the private or third sector in different public services. This should include an assessment of the cost and quality advantages and disadvantages of purchasing services. The Government should establish a centre of excellence for research into applied contracting (for example, through establishing a new "What Works Centre").
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79 Q572
80 LCC0013 (UNISON)
81 Q395
82 Q398
83 HM Treasury, Managing Public Money, Box 4.8
84 Department for Work and Pensions, Work Programme evaluation: operation of the commissioning model, finance and programme delivery, December 2014, p. 218
85 Professor Gary Sturgess LCC0023
86 For a full description of "What Works Centres" and description of their function see Government What Works Network (2018)