Introduction

The wider liberalisation of local authority services started once negotiations began to extend the Government Procurement Agreement (GPA) to local government in 1988 and inclusion in the emerging General Agreement on Trade in Services (GATS) through the GATT Uruguay Round that started in 1986. This had a significant effect on the outsourcing of local government services that had hitherto been delivered by directly employed staff. Margaret Thatcher's government anticipated this through the application of Compulsory Competitive Tendering (CCT) in 1988 and it was continued by the Labour government's approach through the best value regime (Wilson, 1999). The policy approaches adopted by successive governments were framed in an immediate ideological construct of New Public Management (NPM), which diverted the public sector away from the underlying international agreements that the UK had entered into (Dunleavy and Hood, 1994). However, the wider role of performance culture supported the establishment of local authorities as more credible institutions than other parts of the UK state by 2010.

The expansion of the GPA, together with the application of GATS to sub-national government, introduced some mechanisms for implementation (Audet, 2002). In order to ensure that states complied, an international system of single national accounts (SNAs), initially agreed in 1968, was updated through a UN agreement in 1992 as the World Trade Organization was coming into being (Preeg, 2012). While not mandatory within the WTO, in 2002 the EU agreed that each member state should prepare the SNA. In the UK, these were introduced in 2007 following the Atkinson Review (Atkinson, 2005a, 2005b). SNAs established the system of assessing the scale of public expenditure by sectors and how much of the budget is to be exposed to competition as a consequence. They also support assessments of national and regional productivity and the Treasury commissioned specific reports to accompany these assessments (HMT, 2001, 2004).

In preparing the SNA, governments were required to assess all public expenditure. This was then used to ensure that a sufficient portion has been exposed to competition across all sectors so that none was protected. The role of local government is significant in the SNA. It has been estimated that the expenditure of local government represents 65 per cent of all state expenditure in the Organisation for Economic Co-operation and Development (OECD) although this varies between states (Audet, 2002).