Martin Ford 30 October 2018

Reform outsourcing to avoid £30bn bill, think-tank warns

Reform outsourcing to avoid £30bn bill, think-tank warns image

Bringing outsourced services in-house would cost local government £30bn, a think-tank has calculated.

The Ethical Commercialism report published by Localis today warns that councils would pick-up the bill in the event of a collapse of the outsourcing sector.

And private firms must reform their behaviour to stave off such a disaster, it concludes.

The report shows moving all local services in-house would cost the public purse at least £30bn – with costs potentially outstripping savings with the market worth at least £69bn annually.

Localis chief executive, Jonathan Werran, said: ‘A diverse, flexible and open market for local public services is one worth preserving for a very pragmatic reason – that being to keep going the countless thousands of vital services which millions of residents rely upon in their daily lives.

‘Local government and the wider public sector simply can’t afford the rapid collapse of a mature and complex market.’

Localis argues that the market is in a ‘precarious’ state in which ‘margins for failure have become perilously narrow’.

The report suggests greater levels of openness and transparency on the part of the council and standards of behaviour from private companies can preserve public trust in outsourcing.

This can be secured when drawing up contracts with social, environmental and economic conditions beyond value for money and suggests expected loosening of procurement restrictions outside the EU could help in this post-Brexit.

Co-branding of contracted services with the logos of service providers and the employment of ‘relationship managers’ by councils is also suggested.

Mr Werran added: ‘There needs to be a reform on all sides. Private sector firms need to walk the walk of acting with fairness and decency in delivering public services.

‘For their part local authorities must take responsibility for drawing up contracts that encourage good commercial behaviour and for presenting their commercial dealings to residents in an open and transparent way which can be readily understood.’

Managing director of CIPFA's consultancy service, C.Co, Richard Harrison said: ‘Local residents, rightly expect high quality services delivered with integrity and transparency.

‘We are seeing some excellent examples of new models emerging, which put ethical behaviour at the heart of service delivery. Wherever possible, we should be encouraging organisations which deliver social value, as they deliver greater benefits to our communities.’

Highways jobs

Social Worker

Kirklees Metropolitan Council
£24,799 - £32,878
Do you feel that you can work to deliver the outcomes of personalisation?  Kirklees, West Yorkshire
Recuriter: Kirklees Metropolitan Council

Partnerships & Activities Manager

London Borough of Bexley
£31,353 - £36,876
Seeking an experienced manager to work in the Parks and Open Spaces Team of Bexley Council’s Communities Department. Bexleyheath, London (Greater)
Recuriter: London Borough of Bexley

Personal Assistant

Camden London Borough Council
£30,066 - £34,538
We have an exciting opportunity for an experienced and professional Personal Assistant to join the Supporting People Directorate. Camden, London (Greater)
Recuriter: Camden London Borough Council

Strategy and Partnerships Officer

Royal Borough of Kingston upon Thames Council
£25,809 - 42,684
This is an exciting role in the new Strategy and Engagement function at the heart of the Council, supporting the... Kingston Upon Thames (City/Town), London (Greater)
Recuriter: Royal Borough of Kingston upon Thames Council

Bridges & Structures Technician/Inspector

Swindon Borough Council
£23,014 to £30,980 p.a. depending on qualifications and experience
We are seeking a Technician/ Inspector either as a fully qualified and experienced individual or as a Trainee. Swindon, Wiltshire
Recuriter: Swindon Borough Council

Local Government News

Latest issue - Local Goverrnemnt News

The March issue of Local Government News explores alternative funding channels that are available to councils beyond the Public Works Loan Board, what hurdles merging councils face in coming together, and how local government is handling GDPR.

This issue also has a special highways and street lighting section exploring how councils can use lighting to embark on their smart city journey and using IoT technology to weather the storm.

Register for your free magazine