​​KembaraXtra – Legal Terms – Market Testing


Market testing is the process of comparing the performance and cost of public services provided internally with those offered by outside contractors. The objective is to identify the most efficient and cost-effective supplier.


The practice became common in the United Kingdom during reforms aimed at improving public-sector efficiency. Services such as healthcare, prison management, and administrative functions were subjected to competitive testing procedures.


Authorities undertaking market testing must consider factors such as quality, economy, and effectiveness rather than focusing solely on price. The process is closely linked with principles of best value in local government.


Supporters argue that market testing improves accountability and efficiency, while critics sometimes contend that it may undermine service quality or public-sector employment conditions.