Contracting out and administrative justice

Contracting out and administrative justice

Robert Thomas (University of Manchester)

Much of the thinking and debate about administrative justice concerns the need for government to make good quality original decisions and to get things right first time. If only administrative officials could become better at making decisions and learning from their errors, then the range of administrative justice problems that commonly arise and the need for external redress would be reduced.

To a large degree, this sentiment remains valid. But this approach does not provide a comprehensive perspective. The conceptual framework underpinning it no longer adequately captures the reality of what happens in many areas of government.

This is because government is often no longer solely responsible for administering its policies. In many areas, government departments and other public bodies have become increasingly detached from the implementation of their own policies. Delivery has increasingly been outsourced to private contractors and third sector bodies. Such contractors now often comprise the public face of both central and local government. They deliver front-line and complex public services that directly affect people’s legal rights and entitlements, such as making benefits decisions, providing accommodation for asylum claimants, and providing adult social care.

Indeed, Weber’s definition that the state comprises that “human community that claims the monopoly of the legitimate use of violence within a given territory” has for some time been incorrect. Physical force and restraint are regularly used by private contractors to which government has outsourced the management of immigration removal centres and the task of escorting and removing immigrants from the UK. The same applies to privatised prisons. We can also see trends toward greater contracting out. The Home Office is currently considering whether to outsource substantive asylum interviews to a private contractor in order to give it the capacity to get on top of the rising backlog of asylum claims.

In this context, private contractors have increasingly come to perform core administrative justice functions. These include: the initial handling and processing of applications; taking of substantive decisions on people’s entitlements; enforcing the law and issuing civil penalties; considering representations made against such penalties; considering administrative reviews of original decisions either taken by the same contractor or by government officials; and the handling of complaints people make about public services delivered by contractors.

In this way, the structure of both administrative governance and administrative justice has been shifting. The monopoly of the ‘administrative state’ has been giving way to, and being supplemented by, a new ‘corporate outsourced state’. Administrative justice can now be divided into ‘ordinary’, that is, public-based administrative justice and ‘outsourced’ administrative justice, in which there is either a mixture of private and public provision or delivery has largely been contracted out.

As private providers come to deliver public services and perform administrative justice functions, they in turn bring their own interests and values to the table. Private contractors are profit-seeking enterprises that seek to extract profit from the delivery of public services to increase shareholder value and dividends. Outsourcing is premised on the view that market forces promote efficiency and competition. Further, there is the Hayekian notion that knowledge produced by the market – its assessment of value and cost – is inherently superior to other forms of knowledge, such as professional knowledge. But, in practice, the outsourcing market for central government services has for some years become increasingly oligopolistic: it is dominated by a small number of large corporate contractors (Capita, Serco, G4S) which win the majority of contracts from UK central government.

The question then arises as to how outsourcing affects the quality of administrative justice. Outsourcing may, for instance, affect the quality of initial decisions, the procedures used, the availability of external redress. But the issues go wider than the performance of specific contractors. Government remains part of the picture, albeit its role changes with outsourcing. Government delegates delivery, but retains important roles in terms of making policy, agreeing contracts, and then managing and monitoring them. There is also the question as to whether, and if so how, contracting out impacts upon the types of professional knowledge required in the delivery of public services.

How then are we to understand these developments? Outsourcing is a politically contested issue. In general terms, I do not subscribe to the view that outsourcing, as a whole, is either inherently good or bad. It is too large a topic for such generalised and simplistic assertions. What is required are detailed and informed assessments of how outsourcing operates in specific institutional settings and its consequences for administrative justice.

To investigate matters, I have examined a number of different instances of ‘outsourced administrative justice’ to consider its implications and to understand the underlying structural changes it has brought – and is bringing – about. The resulting paper is here.

Outsourcing has at least the potential to enhance the quality of administrative justice, but this requires conscious efforts by both government and private contractors. More often, the consequences of outsourcing for administrative justice have been negative for individual users and their experience of administrative justice. I argue that this can be attributed to a number of factors: the scale and organisational complexity of public services; the professional knowledge they require; how government rewards, incentivises, and monitors contractors; the focus given to the needs and perspectives of users; and the balance between values such as cost-efficiency and administrative justice norms. The paper highlights large-scale areas of outsourced administration in which administrative justice has been weakened. It also suggests way of preventing this from recurring.

This might make us sceptical about outsourcing. At the same time, we should not fall into any assumption that the quality of administrative justice in the context of services delivered by government and the public sector is inherently better. Nonetheless, it is almost certainly the case that administrative justice – and public law more broadly – have not yet properly grappled with the governance and accountability challenges presented by the transformation of private contractors into de facto governing institutions. Like automated and digital government, outsourcing has developed incrementally and piecemeal without much of an overall plan or evaluation.

Overall, if outsourcing is to function effectively and not diminish administrative justice, then there is a significant responsibility on government to do much more when it contracts out functions and then manages the performance of private contractors. The other option is for government not to outsource.