Debra Allcock Tyler: Competition does not bring quality - the horsemeat scandal tells us that

Quality services can't be done on the cheap, says our columnist

Debra Allcock Tyler
Debra Allcock Tyler

I am sick to the back teeth of hearing politicians and commentators blathering on about how the voluntary sector needs to be more competitive in order to get money out of government to serve their beneficiaries.

In fact, my back teeth are now so ground down that I'm considering sending my dental bill to the Prime Minister in protest.

The misapprehension that competition improves quality is one of the most ridiculous, unproven, yet widely spouted myths in our society today. It is a dangerous misunderstanding. Competition does not improve quality - it drives down prices, even in the private sector.

In fact, private sector companies almost never reduce prices by reducing their profit margins.

Why would they? They're in the business of making a profit.

No, they reduce prices by cutting costs. They often do that by buying a cheaper product - or forcing a supplier to charge a lower price, inevitably resulting in the supplier cutting costs, usually at the expense of providing a quality product or service.

We read story after story, not least in this publication, of charities being forced to cut costs and thus forced to deliver services of a lower quality than they otherwise would have done. Thankfully, many of them (as we saw with the Work Programme debacle) decided that quality matters more, and got out of that game.

There's a reason some things are cheaper than other things, and it's usually that they're lower-quality products. We in the voluntary sector have to stop colluding with the government's assertion that a quality service can be done on the cheap.

The truth is that it can't. Serving vulnerable people and causes is expensive. For example, it is more expensive to give a proper service to people with debt problems. The cheap option is to direct them to a debt adviser. That way, the existing debt gets dealt with, but nothing happens to change the underlying behaviour that got them into debt in the first place. Guess what happens - they turn up again in, say, a year's time, with new debt.

The quality option is to deal with the driver of the debt: the unemployment, the depression, the changed social circumstances, the lack of financial literacy or whatever the underlying cause is. That way, both the debt and the long-term behaviour problem are dealt with. That takes more time and costs more money in the short term, but saves masses in the long term.

Of course the voluntary sector should cost more than the private sector. The private sector, for a cheap price, will drag the drowning person out of the river, whereas the voluntary sector will go upstream and find out why that person fell into the water in the first place.

So colleagues, please stop agreeing with the nonsense that competition is good for beneficiaries. It's not. If you compete, you drive down prices. If you drive down prices, you get horsemeat.

Debra Allcock Tyler is chief executive of the Directory of Social Change

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