David Cameron is to "completely change" public services, bringing in a "presumption" that private companies, voluntary groups or charities are as able to run schools, hospitals and many other council services as the state.
Writing in the Daily Telegraph about the plans, to be published in a white paper in the next fortnight, the prime minister says he is seeking to end the "state’s monopoly" over public services, with only the security forces and judiciary exempt.
Private sector bodies will get an automatic right to bid for the bulk of public work. Many elements of the NHS could soon be provided by private firms, schools run by charities and mutuals could take over the provision of council services.
Another basic principle will be that where possible the successful bidder should be a local initiative.
Downing Street says the reforms represent the most fundamental shakeup of public services since the early postwar era, the prime minister describing them as a "battering ram to break open monopolies".
A system of independent adjudication will be established to ensure quality.
Cameron writes: "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, open to everyone who gets and values the importance of our public service ethos.
"Instead of having to justify why it makes sense to introduce competition in individual public services – as we are now doing with schools and in the NHS – the state will have to justify why it should ever operate a monopoly."
Labour is likely to step up its attacks on the reforms, emphasising that they are code for a dismantling of institutions such as the NHS – a critique that Labour leader Ed Miliband made over the weekend when he said the botched government sell-off of forests was an example in miniature of what the coalition may do to other cherished institutions.
The Labour government under Tony Blair opened up some public service provision to external bodies including third sector organisations but it was resisted by unions. As health secretary, Andy Burnham sought to reverse the trend by saying in-house services would be the "preferred provider" of the NHS, unnerving many Labour modernisers. Now the government is seeking to go much further, with Cameron talking of ending the era of "old-fashioned, top-down, take-what-you’re-given" public services.
He hopes people will view the reforms as being in the tradition of the mutual movement. But unions will be aghast at the extent of the reforms.
The government hope those charities smarting from having their revenue streams cut by this government will realise these new plans to get them involved in public service provision open up a much greater market for them.
Explaining his motivation for the reforms, Cameron described the frustration he and his wife, Samantha, felt when caring for their disabled son, Ivan. "I never understood why local authorities had more control over the budget for his care than Samantha and me."
The state will still have a role in ensuring "fair funding, ensuring fair competition, and ensuring that everyone – regardless of wealth – gets fair access".