Is outsourcing failing public services?
Published by Paul O'Brien on Monday, August 27th, 2012 at 01:29 am
Connaught, Rok, Southern Cross, Mouchel, IBM in local government, not to mention wider public sector outsourcing problems with A4E and G4S- there really is a lengthening list of problems with outsourced contracts.
And then there are those contracts that are quietly ended ‘by mutual agreement’ to avoid costly legal action, saving reputations, but often masking serious problems.
APSE has always advised that when you begin the procurement process proper you should be going beyond the seductive sales pitch and going thorough due diligence on who you are 'partnering' with for the considerable future. However, despite numerous warnings on the capability of some contractors to manage their own business, let alone deliver vital public services, some council’s appear unable to resist the call of the promised savings and proceed to hand over huge swathes of core council activity.
As a Conservative MP observed only this week when commenting on yet another failing contract South West One) “ …. the projected savings are a wish list of hope over stupidity”
That is not to say that there are not private sector companies out there who deliver public services well but surely now there must be an urgent need to beef up the risk analysis elements of the commissioning and procurement processes. And to recognise that the private sector frequently fails to deliver. There has been a whole industry developed over the past couple of decades pushing the message that the public sector is poor at delivery and that bringing in the private sector is guaranteed to improve services and save money. However public sector decision makers need to have a more questioning mind and avoid following the prevailing orthodoxy of the day, just because it appears fashionable.
The public sector needs to understand that if you are procuring or commissioning a partner then you may have to terminate that relationship at some point, bring the contract back in-house and ensure you retain the capacity and capability to do so.
Indeed it seems even some of the most unlikely people like Merrick Cockell, Philip Hammond and Jeremy Hunt have begun to question some of the fundamental thinking around outsourcing core public services in recent press statements. With the former suggesting that in times of austerity it is better to retain direct control over services as it gives you the flexibility to change and adapt that being locked into a long-term contract doesn't.
Maybe I am being too optimistic in hoping that more decision makers will start to ask some fundamental questions about who is best placed to deliver the very services the public depend on, with the minimum amount of risk. I certainly think that anyone who ignores the lengthening list of outsourced failures and doesn't build safeguards into their processes will do so at their peril.