Over the last two decades British central and local government authorities have pursued a revolutionary strategy that has progressively outsourced the provision of public services to the private sector. This transfer of public resources to the private sector is founded upon a simple good-bad typology. Supposedly, the public sector is inefficient because it lacks incentives and a profit motive, whereas because profit-driven private firms compete in competitive markets inefficiency is driven out and value for money delivered.
In recent years outsourcing contracts with the private sector have increased as a share of total government external procurement from 34% to roughly 60% (see figure 1). The outsourcing relationship between central and local government agencies and private sector counterparties is mediated through the ‘outsourcing contract’. These contracts represent a form of decentralised, capillary power capable of reinforcing ‘governmentality’, a term coined by Michel Foucault and referring to the way in which the state can exercise indirect control at a distance.