Managing outsourcing contracts and partnerships is becoming a real challenge, say local authority leaders, due to a skills gap in the public sector.
The society of local chief executives (Solace) fear a lack of internal expertise may undermine supply chain risk management, according to targeted research carried out by Zurich Municipal
The research revealed that while the vast majority (96%) felt that specialist risk management skills were required to manage the delivery of outsourcing and partnerships, only one in two (48%) believed they currently had these skills in-house.
As a result, a number of authorities (12%) find managing the risks and challenges associated with outsourcing, contracts and partnership working 'a real challenge'.
Whilst many authorities view supply chain risk as a strategic, board-level issue and have made progress in tightening up contracts and creating exit strategies, a lack of internal ownership is still impeding progress. A significant minority (16%) confess to not having a designated senior-executive level 'owner' of supplier and partnership risk in place and a further quarter (24%) maintain the belief that responsibility for risk can be delegated to others through outsourcing.
Andrew Jepp, head of local government at Zurich Municipal, commented: "When properly managed, outsourcing and partnership arrangements can help cut costs, improve efficiencies and help relieve resource pressures for local authorities. But these relationships need active ownership and specialist expertise to succeed.
"It is good to see risk management firmly on the agenda of local authority chief executives –now they need to ensure they have the internal skills and sponsors in place to help deliver against it."
David Clark, director general of Solace commented: "These findings are a timely reminder that, particularly in the context of outsourcing, managing risk in the supply chain is a corporate necessity. Developing the skill sets to understand, let alone manage, this risk is still something that the industry must address."
