Public-Sector Reform

Abstract

A key element of the Labour government’s microeconomic reforms was a major restructuring of the public sector. Boston described the reform programme as ‘one of the most comprehensive reorganisations of the public sector initiated anywhere in the West in the postwar period’¹ The aim of the reform programme was to increase the efficiency with which resources were used by the public sector and to improve the accountability of the public service to the political executive and parliament. The measures introduced included:

• The separation of commercial and non-commercial activities, with commercial activities being largely devolved to public corporations charged with operating on strict commercial lines;

• The privatization of many public corporations, once measures were in place to ensure adequate competition;

• An increased emphasis on user pays and full cost recovery for services provided by the public sector;

• Changes in the operation of core government services involving greater autonomy for departments in managing their activities;

• Reform of public-sector pay bargaining;

• An overhaul of the health and education services.