ABSTRACT
The Thatcher government, which launched the FMI, was responsible for taking many public sector bodies directly into the private market sector by way of privatization. Within the public sector, the ‘Next Steps’ programme, launched in 1988, set out to reorganize central government to take greater
account of the needs of customers. Executive functions were increasingly transferred to agencies headed by chief executives with defined tasks and budgets. Reforms in the National Health Service were designed to separate the role of the customer and the provider, to allow negotiated contracts of service and to make managers responsible for performance against specified standards. The Treasury’s Competing for Quality in the early 1990s continued the process of introducing service contracts and service level agreements which defined standards of performance and responsibility for achieving them; departments and executive agencies had to publish annual targets for market testing. Local authority compulsory competitive tendering (now abolished in Best Value) was extended and health authorities and trusts had to report on market-testing plans. This was within the context of John Major’s Citizens Charter, which aimed to improve government services by greater customer focus and making public services more responsive to the wishes of their users (customers).
