In or out

Spoke this morning at a conference at the QE11 centre in London on Outsourcing and Shared Services - except I spoke about the failings of outsourcing over the past twenty years in England and why so many authorities are now insourcing services. I have got to say I was pleasantly surprised that the audience were very receptive to my message and the nine key lessons if still outsourcing services which I mentioned.

The event opened up with Amanda Lewis author of an outsourcing guide, followed by Jonathon Carr-West from the LGIU who suggested that local governments future role should be more about commissioning and less about delivery, I have got to say that the LGIU's position on this surprised me greatly. I then gave APSE's perspective on insourcing as an approach in terms of why so many authorities had returned services in-house following bad experiences of outsourcing. This was in the main because of a failure to deliver on the promises made and because it is a much more efficient method of service delivery whilst maintaining control of your own destiny. There is a significant body of evidence building up on this now ranging from Deloitte to the Obama administration on insourcing and from organisations such as the Audit Commission, Zurich Municipal, SOCITM and LSE who have made various criticisms of outsourcing. Some authorities will continue to have services contracts with partners and when it is kept to specific areas then in some instances this has proven to be successful, the more complexity added to the approach then the less successful it appears to be and the authority appears to run into capacity and capability problems of its own in terms of its ability to manage the relationship for their citizens benefit.

Cllr Colin Noble, who is involved in shaping Suffolk County Council's controversial New Strategic Direction, followed me. Whilst APSE may disagree on the overarching present strategy of where Suffolk are reportedly trying to go in divesting themselves of the vast majority of their services, some of Colin's ideas around community and third sector involvement are interesting and we had a good chat after the session closed. The audience were very fair and their appears to be a bit of a rethink going on amongst many at present as to whether outsourcing services is really the answer to public sector organisations funding crisis or whether it’s going to lead to further long term pain.

One of the things we were all agreed on was if there is to be greater involvement of the third and voluntary sector in public service provision then this will be best achieved on a gradual evolutionary basis by collaboration, facilitation and development. As soon as you start to make this significant in scale then European Procurement Directives will kick in, you will be forced to contractualise the process and the private sector will wipe the floor with the third sector.