Reason's Pivotal Role in the Thatcher Revolution

How Robert Poole's vision of contracting out services has saved the Brits billions.


The passing of Lady Margaret Thatcher (or "Lady T," as we called her) brings back many memories of those exciting years between 1975 and 1979 when the ideas that became "Thatcherism" were being hatched. Key among those ideas were: 

  • The privatization of the commanding heights of the economy
  • Bringing unions back under the rule of law
  • Selling public housing units at deeply discounted prices to sitting tenants.

Another central idea was the contracting out of local authority functions to private providers. Contracting out was all but unknown in the U.K. until former Reason editor and Reason Foundation founder Robert W. Poole published the seminal policy monograph, Cut Local Taxes—Without Reducing Essential Services in 1976. That study, which had been commissioned in the U.S. by the National Taxpayers Union, formed the core of what later became Bob's 1980 book, Cutting Back City Hall. The basic point of both publications was that virtually any and all services should be opened up to competition, if not forsaken by the public sector altogether. Properly structured, such a system would improve essential services while reducing costs.

I recall there was one small city in the county of Essex which had private garbage collection but that was the sole example we could come across. Somehow I stumbled across Bob's Cut Local Taxes and imported a few copies for friends in London-based policy-making circles, including Michael Forsyth a rising young star in the Conservative Party and an ardent admirer of Lady T. Indeed, I helped Michael to give her 50 red roses on her 50th birthday outside her home in Flood Street, Chelsea and in front of the world's media.

Michael turned Bob's work into at least three different policy pamphlets circulating widely in the late 1970s including at least one each for the Adam Smith Institute (ASI) and the Conservative Political Centre (CPC). To this day—over 30 years later—ASI tells me that Forsyth's contracting-out paper is its best-ever selling publication at over 25,000 copies.

With Lady T's advent and Forsyth's Poole-based papers, contracting out spread like a really bad disease (though in this case, the infection produced good results). Not only was the level of service delivery hugely improved but there were huge savings as $90 billion in annual services suddenly cost $60 billion when subjected to competitive bidding.

So let me use this sad day not to mourn but to celebrate the $30 billion a year Reason's Bob Poole has saved the U.K. taxpayer for decades now. Why the Queen has not given him an honorary knighthood is beyond me.