Glossary

Commissioning is the process of assessing the needs of people or users in an area and designing and specifying the services to meet those needs. It also involves choosing the delivery mechanism to secure an appropriate service while making best use of total available resources.

Procurement is the specific aspect of the commissioning cycle that focuses on buying goods and services to maximise efficiency and value for money. This runs from initial advertising through to final contract arrangements.

Privatisation means transferring ownership of a government enterprise from the public to the private sector. A newly created private company recovers its revenues from the general public and private sector customers. Government’s role shifts to setting up regulatory agencies and holding the regulator to account for its performance. This model is often used for utilities such as energy and telecoms, and to a lesser extent water and transport.

Outsourcing: the transfer of activities or services that are currently provided in-house to external suppliers. Organisations usually do this to concentrate on what they do best and reduce overall costs. Also known as ‘contracting out’.

Public-Private Partnerships are arrangements for the contracting out of a service to be run by a third party.

Private Finance Initiative – a type of Public-Private Partnership where a private company handles the up-front capital investment of a public infrastructure project. The project is then leased to the public, and the government makes annual payments to the private company.

User-choice – any service in which users choose from a selection of providers, for example a care home.