Public Sector Reform and Employment Relations in Europe

The structure and management of public sector activities across Europe have been subject to an onslaught of reform over recent years (Pollitt and Bouckaert, 2004; Proeller and Schedler, 2005). In the UK, the country where public sector reform has arguably been most far-reaching, the Conservative government of Margaret Thatcher began the process in the 1980s through the introduction of supply-side economic policies designed to dismantle alleged rigidities in the operation of the ‘free market’ (Minford, 1991). These policies included cutting tax rates, deregulating financial markets and — most conspicuously for this chapter — opening up the public sector to competition through privatisation, compulsory competitive tendering and the introduction of internal markets (‘marketisation’) (see Chapter 1, in this volume). The effect on public sector employment in the UK has been dramatic: numbers employed in the civil service, local government and the NHS together fell from 7.4 m in 1979 to 5.8 m in 2005, even though there was a rise in NHS employment between 1997 and 2005 (Horton, 2009) (see Chapter 3, in this volume for a fuller discussion).