Avoiding conflict and anguish in outsourcing

8 October 2010

10 October 2010 | Lindsay Clark

Local authorities following Suffolk County Council’s lead into mass outsourcing must form a relationship of trust with suppliers from the start of the tendering process.

This is the message from Peter Howarth, chief executive of the Society of Procurement Officers in Local Government (SOPO), which represents public sector buyers.

Last month, Suffolk council said it would outsource most of its services in a bid to cut spending by 30 per cent.

Other councils could face similar decisions as they are expected to have their central government funding slashed in the Comprehensive Spending Review, due later this month.

“Trust is what’s often missing from these arrangements,” said Howarth, who also works as a consultant.

“The proper arrangements aren’t put into place from the start of the procurement process. If they are not, it’s not going to work.”

It was crucial for both parties to have strong contract governance, with resources allocated to contract management in order to succeed. Otherwise, outsourcing can lead to conflict.

“I look at some of these partnerships and all I see is pain, conflict, anguish and not an awful lot of working together,” he added.

In September, Suffolk council said it would focus more on commissioning services and supporting other organisations, including voluntary sector and community groups, to deliver services. Half of the £1.1 billion budget is ring-fenced for schools and education, which will be kept in-house, but the rest could be outsourced.

Council leader Jeremy Pembroke the decision was made with consideration of the financial deficit in the public sector and the coalition government’s priority to reduce the deficit and the size of the state.

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