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Government to purchase services from private sectors

Updated: Jan 6,2015 11:30 AM

The Ministry of Finance, Ministry of Civil Affairs, and the State Administration for Industry have jointly issued a ‘management approach for government’s purchase of services’ in order to further transform government functions, and to promote and standardize government procurement of services.

In its provisional approach, the government has stated purchasable services covering six major areas...including basic public services, social management services, industry management and coordination services, technical services and ancillary services needed by the government to perform its duties, as well as other services appropriate for being undertaken by social forces. Many key services like public education, employment, human services, social insurance, environmental management, and urban maintenance are up for grabs in the market.

The government’s role is changing from service provider to service buyer. This switch aims to not only prevent the over-expansion of government employees, but also to save greatly on the government’s budget.

A “management approach for the government purchase of services” has been issued at national level. This approach, though still provisional, covers six major areas.

60 specific kinds of services are listed, including family planning, public transportation and even public education.

Some are concerned, though after all these sectors go private, would they remain affordable as the word private usually stands for paying much more.

The government will only pay a certain amount of money. If any service provider raises the price, its behaviour will be a breach of contract, there are sanctions against such violations and if the quality of service cannot meet the requirement, there are also some rules that can be applied there too.

The approach also stipulates that the government should promptly adjust the budget to prevent paying for the service as well as hiring “idlers” at the same time.