Letwin says 'discipline and fear' will spur service improvement

Oliver Letwin also suggested giving the public more choice about the services they used could lead to closures of some schools and hospitals.

The Cabinet office minister set out his plans to overhaul the public sector earlier this month telling MPs the reforms would be driven by the principles of choice, decentralisation, diversity, fair access and accountability.

In a speech to consultancy firm KPMG, reported by the Observer, he elaborated on the plans.

“You can’t have room for innovation and the pressure for excellence without having some real discipline and some fear on the part of the providers that things may go wrong if they don’t live up to the aims that society as a whole is demanding of them,” he said.

“If you have diversity of provision and personal choice and power, some providers will be better and some worse.

“Inevitably, some will not, whether it’s because they can’t attract the patient or the pupil, for example, or because they can’t get results and hence can’t get paid. Some will not survive.

“It is an inevitable and intended consequence of what we are talking about.”

The government plans to enshrine in law “a general right to choose” in public services, with new powers for the ombudsman to act as an “enforcer of choice” on behalf of service users.

A Cabinet office spokeswoman said: “It is widely acknowledged that there is a problem with productivity in public services.

“The government’s policy is to improve it and provide the best value for the taxpayer.”