Outsourcing is nothing new for the public sector, but its supporters believe the benefits have still not been maximised.
Initiatives that have gone off the rails have generated bad press and fed a belief in many public bodies that it is a mistake to relinquish control of many processes.
Martyn Hart, chair of the National Outsourcing Association (NOA), acknowledges the caution, but says the organisation believes the approaching financial squeeze will create an environment in which public bodies will think again.
"Organisations in the public sector are feeling two things," he says. "There is the desire to maintain services as best they can while realising that there will be less money; and they are aware of experiences such as NHS outsourcing hospital cleaning, the Prison Service's outsourcing of detention centres and other fiascos.
"The NOA is saying that the future of government is more about commissioning than doing, but they have to commission the right services."
He cites the possibility for an IT service as a prime example: an outsourcer could be better placed than a government body to transfer paper to electronic records, having already made the investment in equipment and training. This matches the traditional argument in favour of outsourcing, that it transfers processes to a supplier with a stronger capability for handling them, while allowing the public sector to concentrate on its core responsibilities.
IT provides a particularly good area for economies of scale, especially in the light of the emphasis in the transformational government programme on the potential savings from shared services, although Hart does not deny the resistance to the campaign.
"Following the publication of Transformational Government, everybody did their own thing, and there was some degree of shared services," he says. "But the NOA's experience of engaging with government is that it is very slow in the field.
"But I think the budget cuts have focused people's minds. Previously they were just ticking boxes, but now they really have to do something. If we can deliver a series of ideas and best practice it can make progress."
Public sector transformation steering committee
The NOA is making a push in this particular field; it recently set up a public sector transformation steering committee. It has attracted members from both sides of fence, with representatives from the Department for Work and Pensions, Nottinghamshire Police, IBM, Eversheds, Logica, DDC, Vertex and Beneden, and while described as a thinktank, it will be focused more on best practice and guidance than policy issues.
"We are trying to attack it practically rather than from a policy perspective," Hart says. "We want to find practical examples of success and where they can be repeated. We want to say 'Here's how it can be done, what you need to bear in mind and what you can do'."
He also talks about a couple of issues that can be applied to the whole field of outsourcing. One is to ensure that a contract does not tie either party to a deal that becomes unworkable because of changes in underlying policies or new requirements. He says it is necessary to build contracts with sufficient flexibility to handle shifts, and that the key could be in an emphasis on outcomes.
"If you are writing a contract that is more about the outcomes you want to achieve you can make it more likely that you get there."
He also warns against the danger of public officials, often those who had been responsible for delivering a service before outsourcing, trying to micromanage the suppliers' operations. This makes it more difficult for the outsourcers to get on with the task at hand and undermines the prospect for delivering the benefits.
"Maybe another thing we can do is signpost the ways of engaging with suppliers," he adds.
Mark Say is senior editor Kable
From Bubb's Blog
From Whitehall Watch
