Last week’s QOTW – what does the Government think about outsourcing?

We asked for comments last week about outsourcing and the public sector, following the leaked minutes of a meeting between Francis Maude and the CBI, which seemed to show the government going cold on the concept. Let's start with the indefatigable Final Furlong:

After a year of negotiating with the top 20 suppliers to government.. one can imagine Minister Maude might have developed a view (or two) on the cons of outsourcing – particularly if he was embarrassed by the fact that government was paying these suppliers multiple layers of profits via a vast range of differing rates negotiated by different Departments who previously had never talked to each other, let alone joined forces in buying the same things from these same suppliers.... Anyway, he could hardly be criticised for handing over a few quid (in comparison) to a few not-for-profit firms (in comparison).

Andrew F Smith made an excellent point about the cost / hassle of outsourcing, but also suggested the antipathy might be temporary:

I think the other factor is timing. As anyone who has been involved in a major outsource knows, it won’t be easy and it will probably take longer than you expected at the outset. Particularly if there is a people (Tupe) or systems impact. The theme of the programme so far seems to be around delivering ‘quick wins’ which a) create some good headlines and b) assist with the immediate deficit reduction. However, as the “easier” projects are concluded with the short term benefits banked, then it seems likely that the Minister will need to encourage more complex programmes (including outsourcing) in order to continue generating both the PR and the financial savings that no doubt is being demanded of him.

Dan pointed out what may be a very fundamental issue holding back more outsourcing:

I’m just studying for Level 4 CIPS, and one of the things I’ve learned is that you should think very carefully when outsourcing ‘core’ services. The problem with government is deciding what is and isn’t a core service – you’ll get a different answer for each voter you question.

When I was a procurement director in Whitehall (under the last Tory Government in the 90s), we debated this at senior level and decided that the only two areas that were truly core were top-level policy advice to Ministers, and the letting and management of contracts; we could in theory outsource everything else and act purely as a policy and commissioning organisation. However, my Ministerial bosses then lost the next election...

We will no doubt come back to this topic: many thanks for your comments as always.

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