Public sector outsourcing: a private issue

AnnieM, February 23, 2010

It’s fast becoming the latest public sector trend. A quick fix way to maximise on efficiency, save money and free up time to concentrate on more pressing tasks. But is private sector outsourcing really the way forward?

On the surface, it’s the ideal solution for any local government organisation. Staff workloads can be drastically reduced by delegating various administrative functions to private companies for competitive fees. More and more private companies are setting up shop, aware of the growing demand for their services. It’s an easy formula after all: tired, overworked public sector staff drawn in by the confident sales pitch of a new start-up outsourcing company. Fixed fees, competitive prices, delegated workloads, the responsibility handed over to someone else. In this results-driven era, the lure for outside help is all too tempting. And perhaps this set up is no bad thing if confined to back-office systems and behind-the-scenes administration.  Why not invest in small-scale outsourcing if it means that low-key administrative tasks can be done without utilising an already overworked public sector work force?

But the real danger of private sector outsourcing is when outsourcing moves to the front line, dealing with highly confidential and personal data about vulnerable people.

Only last week, The Guardian ran a story following a tip off from a social worker about a well-known outsourcing company which was contracted to run a young people’s service in the public sector. According to the newspaper, the company mislaid highly sensitive information, employed staff to work directly with young people without up-to-date CRB checks and failed to recruit key positions in order to boost profits. At a time when many children’s services up and down the country have been steeped in scandal in recent years (Doncaster, Haringey, Calderdale, to name but a few) this is deeply worrying. It is possible that with the growing popularity in outsourcing, instances of incompetence and blatant private sector profiteering will only worsen.

But in the short term at least, the pressing argument against regular outsourcing is the radically different ways in which the private and public sectors operate. It would be a mammoth task – if not impossible - for a private company to properly grasp and understand the inner workings of a public sector client before starting the outsourcing contract. To do so in a relatively short space of time would be to leave a lot of gaps in the public sector jigsaw.

Paradoxically, this difference of culture can also serve as a means of boosting efficiency too. Consider a public sector employee who sends out a late NHS appointment letter to a patient, or a letter from the council sent to the wrong address. This is seen as ‘typical’, and as such, no one complains. Yet any private sector employee would be hauled over the coals for doing much the same. So in this way, outsourcing to private sector companies could also mean a change in attitude (albeit slight) and a clearer accountability line for all employees.

Clearly, it’s swings and roundabouts. But in a climate where virgin outsourcing companies are as common as the bus you weren’t waiting for (and then three come at once) how will public sector organisations know which companies to work with? There isn’t yet a Which? guide to private sector outsourcing companies. It’s a risky business.

Yet, outsourcing to the private sector can work, if time is on your side, if the right questions are asked and if the correct research is conducted. But it’s a minefield out there, and the reality is that few people will even have the time to carry out such necessary checks. One thing is certain: we are going to hear a lot more about the outsourcing debate in years to come - it’s only just picking up speed.