Almost all public services could be opened up to private companies under plans being put forward by prime minister David Cameron.
In an article for the Daily Telegraph, the PM said that “complete change” was needed in the public sector to improve standards for users.
A new presumption that private companies, voluntary groups and charities should be allowed to bid to provide services would allow the government to transform public services without having to legislate repeatedly to allow different providers to get involved.
The changes, to be set out in a white paper within the next fortnight, could allow non-public providers to run hospitals, schools and council services such as maintaining parks, adult care, special schools and roads maintenance.
Outside providers would be offered payment-by-results contracts, increasing their earnings as the quality of services improves.
Mr Cameron wrote: “We will create a new presumption - backed up by new rights for public service users and a new system of independent adjudication - that public services should be open to a range of providers competing to offer a better service.
“Of course, there are some areas - like national security services or the judiciary - where this wouldn’t make sense. But everywhere else should be open to real diversity.”
Mr Cameron said that the changes would release the public sector from “the grip of state control”, ending the era of “old-fashioned, top-down, take what you’re given” services.
The government hopes that the plan will reduce bureaucracy, improve quality and save money.
But it is certain to be opposed by Labour, the unions and many users of public services.
In his article, Mr Cameron said opening up public services to private sector providers was an important part of his “big society” agenda.
“I would argue that our plans to devolve power from Whitehall, and to modernise public services, are more significant aspects of our ‘big society’ agenda than the work we’re doing to boost social action,” said the PM.
“We will soon publish a white paper setting out our approach to public service reform. It will put in place principles that will signal the decisive end of the old-fashioned, top-down, take what you’re given model of public services.
“And it is a vital part of our mission to dismantle big government and build the ‘big society’ in its place.”
Mr Cameron said that over the last decade, cases of “bureaucracy overruling common sense, targets and regulations overruling professional discretion, and the producers of public services overruling the people who use (and pay for) them” had become the norm rather than the exception.
And he said that at the same time, Britain had been “slipping against comparable countries” in areas such as cancer survival rates, school results and crime.