High profile outsourcing failures have resulted in local authorities bringing services in-house, a conference was told.
Delegates at the Public Sector Solutions Expo in London were told incidents like the collapse of Carillion last year had made some local authorities rethink outsourcing, but they needed to ensure the capability and capacity was there to insource.
David Levy, head of supply chain at Waltham Forest Council, said: “Within local government we have to remember why services were outsourced in the first place. Often things were outsourced because that was the tide at the time and insourcing is now the mood of the moment.”
While some business cases may not have materialised in terms of the benefits that were delivered, outsourced services were likely to have been a “problem service” which the authority was not great at delivering, he said.
In Haringey, moves to insource some services is not just about cost but also the amount of control the council has over the service, according to Barry Phelps, head of procurement at Haringey Council.
“We're going through a process of preparing to insource quite a large service. Trying to build the capacity and capability is quite a challenge,” he said.
“Our driver is more around the control around the services and enhancing the quality of the service delivery by bringing it back in, as well as adding social value locally. It’s building up those levels as part of that business case around insourcing,” he added.
Pam Doyle, deputy director at the Cabinet Office (CO), said when looking to insource services, it could mean you need a different group of people than you've currently got with a different skill set.
While procurers might have concerns around outsourcing following the collapse of Carillion, Doyle added the government had published its Outsourcing Playbook earlier this year in order to provide guidance in this area.
“This really came about because of what happened with the Carillion demise. Although in government, we all knew Carillion wasn't performing particularly well in other parts of its portfolio, I don't think any of us realised that what was actually happening was going to have a big knock-on effect to the whole of government.
“Carillion had contracts, in local government and in central government. It was a really big shock.”
Richard Skelton, procurement service manager at buying consortium ESPO, noticed a decline in local authorities looking for support on outsourcing services.
He added that local authorities shouldn’t forget about the benefits of engaging local SMEs as an alternative to insourcing.
“Don't forget to connect with your local providers as they can provide very local expertise and can play more to your social value agenda.”
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