25 July 2008 | Jake Kanter
Public sector buyers should become better planners to secure value from outsourcing services, according to Peter Howarth, chief executive of the Society of Procurement Officers in Local Government (Sopo).
He said purchasers must understand their long-term objectives and improve communication with suppliers to help get value from a contract and ensure the public gets the right level of service.
His remarks follow the publication of the Public Services Industry Review, by the Department for Business Enterprise & Regulatory Reform (BERR). The study, led by DeAnne Julius, chairman of foreign policy think-tank Chatham House, found that more than 32 per cent of all public services are outsourced to the private and third sectors. This accounts for £79 billion of government procurement spend.
It said independent suppliers have made a "major contribution" to achieving value for money from public services. Outsourcing to private or third sector organisations has secured average savings of about 20 per cent through competitive tendering. But the report said in the future, the government should switch to a focus on value for money rather than cost-cutting.
Howarth agreed. "There now needs to be a more considered approach to move forward. Buyers and suppliers should be better at working together. The private and third sector should also be getting a better idea of public sector culture."
John Cridland, deputy director-general of the CBI, added the government must ensure public-private partnerships flourish.
But the report was slammed by trade union Unison, who described private and third sector suppliers as "sharks" circling public services. "Instead of promising future business for private firms, the government should look at reining in their market power," said general secretary Dave Prentis.