25 January 2020

POLICY WATCH: A fresh look at public services procurement

Aiming to enhance the quality and efficiency of public services, China is seeking to involve the private sector more in a range of activities and help push forward the reform agenda of the nation’s new leaders.

The central government issued on Sept 30 a guideline on government procurement of public services, including those related to education and health, from social organizations and private companies. The document said authorities will rely more on the existing players in the market to provide public services, which should help to boost the service quality as well as create more jobs in society.

The State Council, the nation’s cabinet, said China will gradually carry out such purchases at local levels between now and 2015. It will establish a solid system for government purchases of services from the private sector by 2020, according to a statement posted on the official website.

The new document was in line with the call given by the Communist Party and Beijing’s top leaders to rein in government expenditure on activities such as high-end hospitality and luxury receptions, and instead devote resources to essential things such as high-quality public services.

Public service sectors including education, employment, social security, medical health, housing security, culture and sports, as well as those serving the disabled, should be opened to the private sector in a step-by-step manner, the cabinet statement said.

Service providers such as social organizations, companies or registered institutions will be able to offer public services in the future, it said.

In order to prevent senior government officials from accepting bribes from potential service providers, the government will impose stricter regulations on management of funds for government purchases of public services, in a bid to improve transparency and utilization efficiency.

In December, at a meeting of the Political Bureau of the Communist Party’s Central Committee, participants approved regulations that outlined explicit requirements on how the politburo members should improve their work style, while rejecting extravagance and curtailing bureaucratic visits.

Analysts believe all these moves should help the government to improve services in social security, public health care, environmental enhancement and other fields that are vital for people’s well-being. Tackling those challenges can prevent social conflicts that could undermine the nation’s stability.

Meanwhile, services that should be directly offered by the government, or those not suitable for being undertaken by the private sector, should remain the responsibility of the administration.

Local governments and related departments should study and formulate a detailed catalogue and guidance on the public services that could be procured from private players, the State Council said.

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    EJ Insight writer