There has been much discussion in recent months of the role of outsourcing in the delivery of public services and the value it can bring in helping to transform provision. Equally, there are calls for greater public scrutiny to ensure that major contractors are more transparent in their service delivery and that their performance is held to account.
As a provider of support services to the public sector, it is encouraging to read the CBI’s proposed new measures to boost transparency and trust in private and third sector-managed public services’ contracts. These measures recognise the need to rebuild confidence in the public services’ industry and to deliver the best value possible for the taxpayer.
So what methodology should buyers and suppliers apply to create accountable contract models? The answer lies in developing an outcome-based approach.
For both buyer and supplier alike, there is a growing shift in the outsourcing agenda where the focus is increasingly on achieving transparency between all parties involved. For many organistions it is no longer sufficient to commission on factors such as price or quality alone. Now the onus is on developing models around the wider, social outcomes alongside the day-to-day services that a provider would normally provide.
This is evident in many local councils, housing associations and public service bodies, which are taking a more aspirational view of contract delivery. Rather than focusing solely on the short-term costs and service inputs, there is a move to developing strategic partnerships, looking at greater risk transfer and with a longer-term vision of how people, system and processes work together.
Such contracts will include dedicated key performance indicators around the wider social impact in the local area, with the responsibility placed on the supplier to retain employment opportunities, through programmes such as apprenticeship schemes and the greater use of local SMEs in the supply chain.
Contracts commissioned in this way are often sponsored at a senior level to ensure close ownership and political engagement, with a clear definition of the long-term objectives. This can have a positive impact, with longer contract terms and breadth of service, benefitting all parties as it enables much greater flexibility and the chance to implement new service innovations during the length of the contract.
The right procurement practices play a key role in outcome-based approaches such as this, considering where, how and who delivers services alongside the benefits to the local economy and communities. Here, identifying what the model needs to deliver and how it should be measured is critical. Contracts are being commissioned that can deliver excellent value for money because they are focused on the longer-term strategic goals rather than simply the shorter-term view of cost and inputs alone.
Private and third sector contractors are already working hard to refine their offer and demonstrate how their services will help authorities meet their local aspirations - where the development of individuals, through training and apprenticeships, and the creation of local supply chains benefits the wider community.
We welcome the call for more open and honest client/supplier transactions. Achieving local value, ensuring fairness, retaining workforces or improving quality in the provision of public services can only be achieved if there is transparency from all parties involved.
Ensuring ethical, responsible business practices are maintained is essential if public services are to deliver the best value they can for the people they serve. It’s time we were all held to account.
Andrew Bish is business development director, local government, at Interserve.
