Controversy (and procurement issues) as the Forensic Science Service is ‘wound up’

Here' s a news item that appears quite specialist and self-contained, but actually reflects  interesting market and supply issues that we would argue have wider relevance for procurement generally.

The Forensic Science Service (FSS) is a UK Government body that carries out forensic work for police forces around the UK.  There has been debate to my knowledge for years about its future, and in one of the announcements just before Christmas that got slightly lost in the blizzard / shopping headlines, the Home Office announced it would be 'wound down' as it is losing £2 million a month.  Some of its functions might be transferred to private sector providers, was the rather vague message about the next steps.

We're now seeing a blizzard of condemnation of this plan, with eminent scientists writing to the Times, worried about the FSS role is research, training and the more complex criminal cases where top-class forensic work can make the difference between success and failure for the police and prosecution.

The history of this goes back to the previous government, who opened up the market in forensic services, which led to some serious competitors to the FSS emerging.  That was partly it must be said in response to a feeling amongst users of the FSS that it could be somewhat unresponsive and inflexible; as a monopoly provider, it did have a tendency to act like a monopoly provider!

There was an intent to privatise or at least bring private finance to the FSS, but for reasons I don't fully understand that never happened.  So the issue now is I suspect that the FSS is left with an uncompetitive cost structure (lots of public sector type staff costs, pensions etc), and new lower-cost competitors who probably have creamed off the more lucrative and possibly less complex work.  And indeed police forces have 'insourced' some of the simpler work to save money given their own financial constraints.

But the critics of the move are now mobilising, saying that the FSS is going through a re-structuring anyway that will reduce or eliminate its losses; and that it carries out research and other work that the private sector won't do or doesn't have the capability to do.  There won't be any financial motivation for those private providers to carry out pure research, or act as a centre of expertise for the whole forensics profession.

So is this an example of a market working efficiently?  Should we be happy to let the FSS disappear, and celebrate the power of competition to drive an 'ineffieicnt' provider out of business?  Will any essential research work be picked up by private providers, assuming someone will pay for it (and if no-one will pay, can it really be essential)?  Will the lack of FSS as a benchmark for pricing and performance lead to the private providers' performance slipping?  Will those firms exploit a dominant market position - just how genuinely competitive is the market once the FSS has gone?

I can't answer all these questions, but aside from the general interest as a taxpayer and citizen, and of course sympathy for staff in FSS who must feel very concerned, it is a fascinating conundrum.   I am a believer in general in free markets; but I'm also very clear that they don't always work as perfectly as some economists like to think (the banks sort of proved that...).  So intervention can be justified; not always by government, it may even be procurement people doing so.  Market shaping, we usually call it.

So all we can say definitely in this case is one would hope that the Home Office has carried out a full analysis of the situation; not just the 'savings' side of closing FSS, but a thorough impact analysis in terms of the market effect of the move in terms of quality, competition and future development.

I feel a Freedom of Information question coming on...

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