I make no apologies for writing about outsourcing – having, until the end of 2019, been part of the Interserve Group for 7 years. Emotions run high when outsourcing and public services are discussed. I know only too well having led the Interserve team that bid, won and operated just under a quarter of the privatized probation service. Was it a good thing or a bad thing? Taking what I know of the experience of being at the centre of one of the most politically and socially contentious outsourcing decisions of the last 15 years, and having no lobbying or political axe to grind, I would make a few observations.
To outsource a service, it’s pretty important to know what you want to achieve. Sounds obvious, but time and time again we have seen outsourcing used as a tool to try to cut costs, to fast track a policy implementation, to get rid of a problem – often done in the name of “encouraging innovation” or “bringing together the best of the public and private sectors”. This is mere rhetoric if not accompanied by setting out clearly and in some detail both what the commissioner or policy-maker want to achieve but also acknowledging and accepting the risks entailed in the proposals.
Where the dilemma sits is in the nature of outsourcing public services. Our politicians want their policies implemented. They formulate those policies on the basis of what they promised to do tempered by a judgement on how the public will receive the detail. This leads to a series of compromises when the practicalities of deciding what should, could and can be achieved is worked through.
This results in a series of compromises that have frequently proven to be unsatisfactory – for government, for the outsource providers, for the employees moved between public and private sector (and increasingly being moved back again) but most of all for the recipients of the service – we the public.
The big outsourcing companies aren’t the enemy – the ones I know want to do a good job, want to treat their employees properly, want to pay their taxes and want to contribute to the health of the economy. But the era of big, long term contracts is surely over. It is no longer a model that works for anything other than the most commoditized of services where investment reduces transaction costs and provides value. For complex public services, a more collaborative and fluid approach is needed. Neither the public nor the private sector have the resources or knowledge to run these services in isolation but stand a better chance of improving the outcomes if they genuinely bring together their shared experiences.
Next time – how can real collaboration work – and has anyone actually done it?