Private Sector Involvement (PSI) is a strategy for improving public services by involving the private sector in delivering new services and infrastructure projects. It is the Government’s established policy that departments should make good use of resources from the private sector wherever possible to uphold the economic and fiscal objectives of maintaining a small and efficient government, contain the size of the civil service, and promote business opportunities and jobs in the private sector. With PSI, better services are provided by operators in the market, while civil service can focus on other more vital functions that must be performed by civil servants.

Different types of PSI, mainly outsourcing and Public Private Partnerships (PPPs), should be considered either when providing new services or when improving existing services.

Outsourcing

Outsourcing is encouraged within the civil service when it can improve the efficiency and quality of services. It is in line with the Government's policy of "big market, small government". Successful outsourcing requires careful design and effective management, but when done well can allow the Government to make use of the free market to provide better services while the public services focus more on policy, regulatory and statutory functions.


Public Private Partnerships (PPPs)

In a PPP, both partners from the public and private sectors bring their complementary skills and assets to a project. The levels of involvement and responsibility may vary for different projects and for different players. PPPs are more common for infrastructural facilities such as tunnels developed using the Build-Operate-Transfer approach.


Role of Efficiency Unit in PSI

The role of the Efficiency Unit in government outsourcing is to help departments consider the use of the private sector and to promote best outsourcing practices. We support Government bureaux and departments by a combination of methods, including the EU Help Desk, feasibility or business case studies, preparation of procurement documents, post-implementation reviews, training and seminars, and the production of guides to good practice and case summaries to help departments learn from overseas experience. More information on relevant guides and reports issued by us is shown here.


Impact

We have conducted biennial surveys of the Government's outsourcing since 2000. The information obtained helps departments identify and resolve problems they face and ensure value for money is being achieved. Survey reports are available for viewing: 2000, 2002, 2004, 2006, 2008, 2010, 2012.


A comparison of the results of the 2012 Outsourcing Survey against those of the previous rounds shows that there has been improvement in the outsourcing practices of Government bureaux and departments.


Engagement of Social Business

Arising from our work with the Social Innovation and Entrepreneurship Development Fund Task Force of the Commission on Poverty, we are starting to assess the feasibility and approach of engaging social businesses to help deliver improved public services through “Payment by Results” schemes, such as social impact bonds.