Local authorities are losing their appetite for outsourcing and rethinking their relationship with the private sector, a new survey has revealed.

The survey of local government leaders, chief executives and mayors, published by the New Local Government Network (NLGN), found that 39% say they will outsource less over the next two years.

It also showed that only 15% say they intend to outsource more over the next two years, while 46% indicate no change from current levels. 

The poll was published in the NLGN’s new report, From Transactions to Changemaking: Rethinking partnerships between the public and private sectors, which argues that the declining confidence in outsourcing suggests councils are ‘seeking greater control over service delivery arrangements’ in the face of funding and demand pressures.

It also says the changing perception of outsourcing is due to high-profile failures like the collapse of Carillion.

There is a need to reform how public-private partnerships work, the think tank’s study concludes, to make sure they are less transactional and more geared towards delivering genuine social impact for public spending.

‘Our findings show that the public sector is already rethinking its relationship to the private sector. But the current national political debate is missing the point,’ said Adam Lent, director of the NLGN.

‘The Conservative Government takes a business as usual approach to outsourcing, while the Labour Party advocates taking everything back in house.

‘Our research finds that it is not a question of more or fewer partnerships, but establishing better ones. With new measures to boost oversight, make contract performance more transparent and to enhance the social return on public investment, partnerships will be fit for purpose for today’s challenges.’