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Ministers have been privately advised to allow schools and hospitals to fail if the government is to succeed in its overhaul of public services, confidential government documents reveal.
The prime minister will today announce long-awaited plans to "end the state's monopoly" over public services and give people more "choice and control" over what they use, in a white paper opening up swaths of the public sector to private companies, charities and mutuals. David Cameron will claim that the welfare state is failing, and promise to "release the grip of state control and [put] power in people's hands".
Under the plans, communities will be allowed to set up neighbourhood councils to commission services on a hyper-local level, individuals will get more personal budgets to buy their own services and the use of payment by results will be expanded to encourage markets to develop across the public sector.
But documents obtained by the Guardian under the Freedom of Information Act reveal research by civil servants warning that markets are susceptible to "failure" and costs could in fact rise unless a true market is created by allowing public services to collapse if they are unsuccessful.
It opens up the potential for schools, hospitals, social care systems and nurseries to fold without the government stepping in to prop them up. Labour called it an "appalling revelation".
Tessa Jowell, the shadow cabinet office minister, said that the potential for allowing schools and hospitals to collapse was "an appalling revelation".
She said: "The education of children and the treatment of the sick should not be treated as a commodity to be traded, as if healthcare and educations were chocolate bars or washing powder."
David Cameron will claim that the welfare state is failing, and promise to "release the grip of state control and [put] power in people's hands".
national family silver nhs and public schooling