I was reading the results of Tullett Prebon's study of the UK economy and its prospects last night (sad I know; bte they called it project armageddon which isn't encouraging), its a fairly insightful analysis even if I don't agree with all its conslusions, one thing they did think though was privatisation of public services wasn't the best way forward.

"we do not advocate further marketisation or privatisation of the public services, since the evidence of the past two decades suggests that this process does not boost productivity, tending instead to create top-heavy administrative structures and a duplication of functions. Competition within the public services is, in any case, intrinsically artificial."

What they did say was

"One of the key findings of the Green report was the need for greater centralisation in procurement so that government can leverage its size and creditworthiness to extract greater value from its contracts with private sector suppliers."

Which would seem to be in direct opposition to the governemnts idea for outsourcing of services to be done at as local a level as possible, while at the same time using a small number of very large companies to provide the services.

Still government does a lot of things, and the same solution probably won't work for them all