Monday 27 August 2012
Connaught, Rok, Southern Cross, Mouchel, IBM in local government, not to mention wider public sector outsourcing problems with A4E and G4S- there really is a lengthening list of problems with outsourced contracts.
And then there are those contracts that are quietly ended ‘by mutual agreement’ to avoid costly legal action, saving reputations, but often masking serious problems.
APSE has always advised that when you begin the procurement process proper you should be going beyond the seductive sales pitch and going thorough due diligence on who you are 'partnering' with for the considerable future. However, despite numerous warnings on the capability of some contractors to manage their own business, let alone deliver vital public services, some council’s appear unable to resist the call of the promised savings and proceed to hand over huge swathes of core council activity.
As a Conservative MP observed only this week when commenting on yet another failing contract South West One) “ …. the projected savings are a wish list of hope over stupidity”
That is not to say that there are not private sector companies out there who deliver public services well but surely now there must be an urgent need to beef up the risk analysis elements of the commissioning and procurement processes. And to recognise that the private sector frequently fails to deliver. There has been a whole industry developed over the past couple of decades pushing the message that the public sector is poor at delivery and that bringing in the private sector is guaranteed to improve services and save money. However public sector decision makers need to have a more questioning mind and avoid following the prevailing orthodoxy of the day, just because it appears fashionable.
The public sector needs to understand that if you are procuring or commissioning a partner then you may have to terminate that relationship at some point, bring the contract back in-house and ensure you retain the capacity and capability to do so.
Indeed it seems even some of the most unlikely people like Merrick Cockell, Philip Hammond and Jeremy Hunt have begun to question some of the fundamental thinking around outsourcing core public services in recent press statements. With the former suggesting that in times of austerity it is better to retain direct control over services as it gives you the flexibility to change and adapt that being locked into a long-term contract doesn't.
Maybe I am being too optimistic in hoping that more decision makers will start to ask some fundamental questions about who is best placed to deliver the very services the public depend on, with the minimum amount of risk. I certainly think that anyone who ignores the lengthening list of outsourced failures and doesn't build safeguards into their processes will do so at their peril.
Monday 16 May 2011
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.
Wednesday 18 March 2009
'Streamlining the Public Sector' is the title of the Guardian Seminar I have been asked to speak at today. They have asked me to speak in a section of the conference billed as a debate on 'insourcing versus outsourcing'.
I am asked to speak first and give my views as to why market failures have demonstrated that the private sector doesn't always deliver effectively in public sector markets. I also give a summary of the recently announced CPA results which shows that local government has improved rapidly between 2002 and 2008. I use APSE's insourcing research to show the benefits of inhouse provision and suggest that an approach built around continuous performance improvement is the only guaranteed way to deliver excellent public services more efficiently. I conclude by pointing to public sector partnerships as a strong option for allowing innovation within such a framework.
Two other speakers then give their viewpoints and we get into a debate with the audience. The audience are broadly supportive of the position I have taken, in my view this is because my case is built on the tangible rather than anecdotal evidence.
Enfield Chief Executive, Rob Leak, then gives a really thought provoking presentation on how Local Government and Public Services in London are looking at joint working. Rob says that it takes five years to get the type of changes they are proposing correct and it's definitely this type of thinking we need if we are going to deal with the issues we are facing at present, as opposed to the knee jerk reactions proposed by some.
Thursday 12 March 2009
Early start today to catch a flight to Inverness to take part in a debate on the future of local authority waste management services in Scotland at the Chartered Institute of Waste Management's conference. The question was whether they should be outsourced or stay inhouse?
Upon getting there my first move was to look at the attendance list and it appeared a bit ominous with 50 of the 75 or so delegates being from the private sector. I was first up on the debate and gave ten minutes on why all the tangible evidence demonstrates that inhouse services are more guaranteed to deliver excellent services over time. My opponent in the debate, George Neblock, the senior figure for the CIWM in Scotland and former Chief Executive of Aberdeenshire Council makes the case for outsourcing services. We then spend the next hour or so in debate with the audience before moving to the vote. Much to my surprise, given the audience make up, two thirds of them side with my argument.
Basically I pushed the numerous recent private sector failures in the public sector market, local governments proven track record of delivery, the findings of APSE's insourcing research, the lack of evidence base to support outsourcing and the case for continuous performance improvement. The audience obviously agreed that the case for outsourcing Scotland's Waste Management Services was not proven.