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01.10.15

Outsourcing ‘risky’ Met deals could threaten services and mayoral accountability

Plans by the Metropolitan Police to outsource its services to the private sector present “huge risks” and could reduce the mayor’s flexibility in helping the police deal with funding reductions, the London Assembly has warned.

In a report published yesterday (30 September), the assembly’s Budget & Performance Committee cautioned the Met that unsuccessful deals might not “make the savings” it needs and could threaten its performance.

While the force’s strategy is initially focusing on seven back-office services, commissioner Sir Bernard Hogan-Howe wants to review “all but core policing functions” to investigate whether outsourced contracts can provide these services “at better value”.

The committee also criticised the force for “lacking commercial expertise” and “not always following the most logical approach” – which needs addressing if the force is to secure value-for-money deals over the lifetime of contracts.

After the first phase of the commercial strategy, the force will develop a new pipeline of projects for review between 2015 and 2017 – during which the work of dedicated detention officers (DDOs) staffing custody suites could be tested.

Committee chair John Biggs, who is also the Labour mayor of Tower Hamlets, said: “The funding challenge facing the Met is undoubtedly tough – but there is a real risk to the public if it signs a bad deal.

“The Met could find itself handcuffed to a poor contract or even worse if the deal goes wrong. In particular, the Met must ensure it has the business nous to find the right commercial partners and then manage contracts effectively to ensure Londoners’ money is spent wisely.

“The stakes are very high – no one wants to see yet another high-profile outsourcing botch”.

The report follows news that 445 Met staff posts will be transferred to a private joint venture partly owned by French outsourcing giant, Sopra Steria. In a contract with the Cleveland Police, the French firm used zero-hour contracts.

It thus stressed that the London force must be “upfront” about whether it will allow these zero-hour contracts in its own deals.

Biggs added: “There are difficult decisions to be made. By market-testing services, there could be a wave of outsourcing deals at the Met over the next few years. In fact, it has already started – last month MOPAC [Mayor’s Office for Policing and Crime] agreed a deal to contract out the Met’s finance, procurement and human resources services. The Met says this deal will save over £100m, but it will also see 445 jobs moving outside of London.

“This raises questions of accountability. MOPAC is signing the Met up for deals that last beyond the next mayoral term and even the one after that. This could reduce the mayor’s flexibility to shape how the Met responds to funding reductions in the future.”

He highlighted that a “key concern” is that rushing to outsource is driven by budget pressures rather than “wider organisational strength”, meaning risks to service quality are not sufficiently considered.

“The mayor and deputy mayor for policing and crime need to explain in detail whether the political imperative of preserving police numbers until May 2016 (when the current mayor leaves office) at what is clearly an unsustainable level given available resources will be judged as attractively short-term but misguidedly longer-term thinking. Will the next mayor, who will almost certainly have to reduce police numbers, have to do so with a legacy of ill-thought through structural and service weaknesses?”

Finally, Biggs added that rushed outsourcing deals could lead to failure similar to the G4S and Serco electronic tagging scandal. In 2014, the firms were found guilty of overcharging the Ministry of Justice for electronically tagging criminal who were either already in jail or did not exist.

But the Met said in a statement that it is “vital that savings are made” in order to protect frontline services in face of squeezed policing budgets across the country.

It added: “The report acknowledges the challenges faced by the Met and the progress they are making in addressing these. The report highlights the critical need to get all elements of the commercial life cycle right. The illumination provided will be valuable in further improving the commercial strategy and helping the Met meet the enormous challenge of the next Spending Review.”

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