The last decade has been marked by sustained 'top-down' pressure to privatise ancillary services in the NHS. Whilst much has been written about the process from a management science and social policy viewpoint, spatial variations in contracting out have been neglected. This thesis seeks to redress the neglect of this topic through an examination of the geography of contracting out across England and Wales over the period 1985 to 1991. A postal survey of district health authorities produced a privatisation database which revealed three main patterns to the geography of contracting out; first, a rural-urban split; second, a north-south divide; and, third, in London, a contrast between inner and outer districts. Four factors are examined to explain these trends; first, the political attitude of health authority management; second, the nature and outcome of the industrial relations process; third, the influence of private sector bidding strategies; and fourth, the influence of local contexts including local labour markets and local political cultures. Whilst each of these factors has some explanatory power, they could not account for exceptions to the general trends. Consequently, the thesis addresses the key question of how similar districts, in terms of their location, economic and political histories, could achieve different levels of privatisation? To understand the diversity of this process, a case study approach is used which connects together the role of structure and agency. A review of existing theories reveals the inadequate way these interconnections have been addressed and, hence,their failure to explain geographical variations in contracting out.