Tag Archives: Markets

Today’s report by the Audit Commission and the LGA on the future of the local government workforce re-states some stark statistics.

“Government funding for local government will fall by 26 per cent, or £5.5 billion, over the period covered by the Spending Review (2011/12 to 2014/15), and councils must find most of the savings in the first two years. Because staff account for nearly half of all spending by councils, workforce costs have to come down.”

In England, the report adds, local government has already lost at least 145,000 jobs.

The study suggests fairly bullish attitudes to transformation, as you would expect, and outlines some concrete examples of future outsourcing. But the report also says that councils intend to “extend competition to cooperatives, social enterprises and mutuals” (Work in Progress, par 69). This is interesting, but does competition exist between cooperatives and mutuals? is there really a competitive market? Are there any examples of this already?

Of course, it is part of councils’ role to make markets to meet their needs, but how far down this road are we and is this a credible strategy for major cost saving in the short to medium term? If it is, where is this happening? And if it is not, are some councils still unwilling to talk about traditional outsourcing.

Incidentally, the Guardian has an interesting piece on the outsourcing of Islington’s education service by Mark Taylor director of schools, Cambridge Education. This is written by the outsourcer, any other perspectives?

In New York for a few days and crossed the Atlantic with Delta Airlines for the first time and was really surprised by how poor the quality of service was. I had no idea that there could be such variation between transatlantic carriers. The service prior to boarding was good and we left on time, but once aboard I was surprised at how old the aircraft was. The bathroom furntiure was held together by bits of twisted wire and there was no at-seat entertainment. In principle there ought to have been a film on small screens that we could all tune in to watch, but there was a problem with the system so they weren’t working. In any case, this was a long way from personalised entertainment systems that other carriers seem to have as standard where you can choose a film to watch, rather than everyone on board having to watch the same channel, with no ability to pause, rewind, change your mind etc..

The crew were also extremely old-school (and this had nothing to do with their age) and I heard many passengers from the US and France commenting on how unfriendly they were.

Which all got me thinking about markets … My experience will certainly mean that I will not fly Delta again in a hurry. But why did I choose them in the first place, and how could I have made a more informed decision? The public sector does a lot to promote transparent performance, customer information in order to inform taxpayers, citizens and customers. Part of the rationale is that this replaces the market mechanism where informed consumers make free spending decisions. But in my case, at least, I made a rather large spending decision based entirely on price with no wider context about what to expect in terms of quality. Again in my case, Opodo was selling airline tickets as if they were a commodity, as if one were the same as the other, whereas in fact, in my experience, Delta is not equal to other carriers. Over time, I can see that the market will regulate itself by reducing repeat business but aren’t consumer aggregators missing a trick by not including customer feedback in their sales transactions, especially when this might mean people trading up so as to avoid the really poor performers, even if they are the cheapest?

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