Public Sector Focus

14.04.16

It isn’t a simple case of black and white

Source: PSE - April/ May 16

Chris Halward, director of professional development at the National Outsourcing Association (NOA), discusses the delicate balance of whether to outsource public services or not.

In 2013 the National Audit Office estimated that the public sector, as a whole, spent £187bn with private sector providers, with over £80bn spent by local government. 

Since then, as we’ve continued to see pressures on local authority budgets, it seems that, despite outsourcing sometimes having a negative public perception, the growing use of private providers is set to continue. 

In fact, as reported on page 42, five district councils recently joined together to procure back-office services from Capita and Vinci, costing approximately £170m. The nine-year contracts are estimated to deliver £50m savings for the local authorities. 

Chris Halward, director of professional development at the NOA, told PSE: “Despite the public perception of outsourcing, which is not always good, it is something that government have used extensively.” 

Par for doing more with less 

He added that, as budgets are getting tighter for the public sector, there is a sense within government that outsourcing has been seen as “par for the solution of trying to do more with less”, but said that “it isn’t always going to be the right thing to do”. 

Recently it was announced that the Cabinet Office was to undertake a review of all current Atos contracts with central government with an annual spend over £10m. The review was made following recommendations from a Public Accounts Committee (PAC) report into Atos’ role as a contracted supplier in the General Practice Extraction Service (GPES) IT system. The system was designed to allow NHS organisations to extract data from GP computer systems, but started five years later than planned, went over budget and only provides services to two of the eight organisations signed-up as users. 

Halward said: “There is some evidence that some in central government seem to be concerned with the bigger IT outsourcing arrangements that have been taken in the past. 

“There is this sense that we may be able to create internal capability, but there is a considerable capability in that third-party community.” 

Commissioning bodies 

He added that as far as local government is concerned, there are some good examples where councils have taken the opportunity to become commissioning bodies as opposed to delivery bodies. 

“Northamptonshire County Council is a great example of an organisation that has decided if it can re-invent itself as a commissioning organisation then it can reduce its costs significantly – without seeing the quality or quantity of serviced being reduced unduly,” said Halward. 

Black and white narrative 

Discussing the public sector in general, Halward suggested there is a narrative: everything is either black or white. 

“What that turns into is people say outsourcing is great to do, let’s all do outsourcing,” he said. “Then, of course, we have a couple of examples where it doesn’t go according to plan when managing complex activities and the narrative changes to let’s not do any outsourcing. It is a bad idea, let’s do it all in-house. 

“Unfortunately, the world is not black and white. Sometimes outsourcing is exactly the right thing to do, and at other times it isn’t.” 

Halward told PSE that in order for the public sector to avoid outsourcing pitfalls it needs to make sure there is “clarity of vision” before entering contracts. 

“Have a very clear vision of what you are trying to achieve, and what the outcomes are you want to achieve,” he said. 

“I think outcomes is quite an important word, but once you have established that you need to look to try to work with suppliers in a sort of collaborative way and need to be exploring a two-way transparent relationship. Outsourcing all comes down to relationships.”

Tell us what you think – have your say below or email opinion@publicsectorexecutive.com

Comments

There are no comments. Why not be the first?

Add your comment

 

related

public sector executive tv

more videos >

latest public sector news

November too late for pay cap decision, GMB says

25/09/2017November too late for pay cap decision, GMB says

The GMB has criticised the government’s choice to defer the decision of ending the public sector pay cap until the Autumn Budget on 22 Nove... more >
LGA: TfL Uber decision shows need for ‘urgent reform’ of outdated taxi laws

25/09/2017LGA: TfL Uber decision shows need for ‘urgent reform’ of outdated taxi laws

Councils have this week declared that outdated taxi laws need to be urgently reformed following Transport for London’s (TfL’s) decisi... more >
Councils falling short of preventive care obligations

22/09/2017Councils falling short of preventive care obligations

Councils are failing to meet their obligations to prevent, reduce or delay the need for care as set out in the Care Act 2014. New research p... more >

editor's comment

14/08/2017Time for reflection

A lot has happened since the last edition of PSE was published. In particular, the snap general election delivered an astounding result that many of the pollsters and political experts could not have predicted when Theresa May initially called for it back in April. Chris Painter, Professor Emeritus at Birmingham City University, provides ... read more >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the o... more > more last word articles >
149x260 PSE Subscribe button

the raven's daily blog

How would local government look under a Labour government?

25/09/2017How would local government look under a Labour government?

Few will disagree with the statement that the current landscape of local government is one that has been shaped by seven years of Tory influence. Harsh austerity measures have seen pressures on council-run services, as well as the NHS, mount sharply as demand increases. The resurgence of the Labour Party in June’s snap election... more >
read more blog posts from 'the raven' >

comment

Support for councils following Grenfell

04/09/2017Support for councils following Grenfell

Ian Moore, CEO of the Fire Industry Association (FIA), discusses the wider lessons of the tragic Grenfell Tower fire and what measures and assess... more >
A quiet revolution

04/09/2017A quiet revolution

Dermot Ryan, programme director at NHS Digital for the Health and Social Care Network (HSCN), talks to PSE about the importance of moving to the ... more >
Effective leadership in uncertain times

04/09/2017Effective leadership in uncertain times

Dr David Beech, lecturer in people management at Salford Business School, argues that continuous renewal and progress is fundamental to effective... more >
Refocusing professional development

04/09/2017Refocusing professional development

Graeme McDonald, managing director of Solace, discusses the importance of taking time out to focus on learning, especially in the ever-changing l... more >

interviews

‘The HSCN is the realisation of industry best practice’

30/06/2017‘The HSCN is the realisation of industry best practice’

Keith Smith, public sector business development manager at Virgin Media Business, tells PSE’s Luana Salles that health and social care orga... more >
HSCN: The enabler for a more joined-up public sector

26/06/2017HSCN: The enabler for a more joined-up public sector

Mark Hall, Chief Assurance Officer at Redcentric, discusses NHS Digital’s project, the new Health and Social Care Network (HSCN) and what b... more >
Maintaining the momentum for further devolution

25/04/2017Maintaining the momentum for further devolution

Ahead of this year’s mayoral elections, Lord Kerslake, the former head of the Civil Service, tells PSE’s David Stevenson why the argu... more >
New social care funding misses the point

13/04/2017New social care funding misses the point

Clive Betts MP, chair of the Communities and Local Government (CLG) Committee, reflects on the social care funding released in this year’s ... more >