Keywords: outsourcing, public sector, government, policy, cloud technology

Outsourcing policy making could be a radical driver for change

Ivan Ujvari | News | 26 June 2012

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Colin Cram of The Guardian reports that outsourcing seems to back on the governments agenda. With the election of the current government, many thought there would be a move to outsource public services to the private sector, but what instead emerged was the idea of the ‘big society’ and social enterprises delivering public services. While this was an unexpected blow to the private sector, a further hit was given when Cabinet Office minister Francis Maude began hard negotiations to reduce the price of contracts given to private providers of outsourced services to the public sector and then questions were raised about the cost-effectiveness of Private Finance Initiative (PFI) contracts.

These events may have come has a surprise to many considering in 2010 the government insinuated that it wanted to see new entrants in the outsourcing market and David Cameron visited Bangalore for meetings with chief executives of companies such as TCS, Infosys, HCL and Wipro. While these companies, in all likelihood, expected to see big public sector contracts it appears they now feel that any returns on investment so far or possible future opportunities do not warrant the maintenance of public sector ambitions. This may be a valid stance considering the fact a survey conducted in March in the wider public sector showed that only 20% of local government chief executives believed the outsourcing of back office services increased efficiency.

Furthermore, financial challenges are becoming so great in local government; outsourcing as it has traditionally been done will no longer deliver what is required and one change that we may see is councils collaborating on outsourcing. Other changes may be seen in the systems used with much more agile approaches and cloud technology being used which will require the outsourcing industry to adapt.

However, the really big opportunities could come from the proposal in the civil service reform plan to outsource the development of some government policies. Though this is not a new idea, it hasn’t been seen since the early 1980s, despite the fact that the private sector seems to be involved in policy making, almost by default. As Colin Cram notes, “Secondments from companies such as Ernst and Young have happened for a long time – and what is that if it is not a form of outsourcing?”