15 December 2010 | Lindsay Clark

The Office of Fair Trading is to examine commissioning and competition in the provision of public services.

The regulator wants to help government buyers promote competition in supplier markets to improve value for money.

Sonya Branch, senior director of services and public markets, said: “By collecting evidence on the impact of specific purchasing practices, our aim is to help policymakers and procurers preserve and promote competition in public services markets.

“Used in the right places and in the right way, vigorous competition among public services providers can increase efficiency, improve the quality and range of services on offer, and achieve a better allocation of resources. In the long-term it can also lead to greater innovation, and substantial savings for the taxpayer.”

The OFT will look at how public sector purchasers create a market for private sector suppliers as government cuts and the “big society” agenda boost commissioning of services to outside agencies, for example. The study will examine how the role of government is going to shape a market where there was not one before, in social and community care. It will also consider how a short-term drive for value for money needs to be offset against longer-term problems of limiting innovation or the number of suppliers in the future.

The OFT plans to publish its report in March 2011.