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The 1988 Local Government Act and Compulsory Competitive Tendering

School of Management, Cranfield Institute of Technology, Cranfield, Bedford MK43 0AL, UK

The Conservative Government's 1988 Local Government Act extended compulsory tendering to a wide range of local authority services mainly supplied in the past by public departments in-house. This article reviews why the legislation was introduced; considers the evidence on efficiency savings from competitive tendering; details the services affected; and concludes by looking at the consequences for local government. Generally, there appears to be ample evidence to support the Government's claim that competitive tendering produces appreciable cost savings. Higher operating efficiency comes, however, from competition rather than 'privatisation'. The Act seems to be having a galvanising effect upon in-house suppliers who are reorganising and changing tneir 'culture' so as to compete effectively.

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