By Gary L Sturgess, Briony Smith, Peter May and Alexis Sotiropoulos

The key to value for money in public services lies at the competitive edge. This is the conclusion of a study from the Serco Institute which reviews the financial savings achieved when monopoly services in five sectors -defence, prisons, local government, waste management and health – were exposed to competition, or the prospect of competition.

The report argues that competition gives permission to public service managers to innovate, and provides them with a mandate and an incentive to implement change. Competition brings new ideas, new ways of working and better ways of managing people. Opening up public service monopolies to competition and innovation can cut costs by 20%, according to this new analysis.

Paying greater attention to the way public services are structured is the way to enhance the use of resources. Liberating front line service managers from red tape and challenging them to step up productivity is the way forward.

The report is based on a review of 200 government and academic studies spanning 30 years, 12 countries and five sectors. It shows savings can be as high as 30-40%. The report finds that value for money in public services is driven by innovation and smarter ways of working.

The report is available from the Serco Institute. http://serco.com/institute/whatsnew/index.asp