PROCUREMENT AND FINANCE
People over Profi t: fi ve ways to improve outsourcing in local government
Outsourced public services are here to stay, argues Joe Penny of the new economics foundation (nef). So how can we ensure that providers prioritise people over profi ts locally?
In
August, a judicial review into Barnet’s controversial ‘One Barnet’ plan to
outsource swathes of its services ruled in favour of the council and against local campaigners.
Over the next ten years private company Capita will now earn £480m through two contracts that cover services ranging from planning and trading standards to human resources and benefi ts administration. Yet, as eye-watering as £480m over ten years is, ‘One Barnet’ is just the tip of a very large iceberg – one which, unlike actual icebergs, is growing all the time.
Though in no way new, outsourcing is now very
big business – £82bn is spent on outsourced public services every year. It covers a huge range of services, including a growing number of ‘human services’, such as social services for vulnerable young people, the probation service, and, of course, the NHS. What’s more, as year- on-year cuts to public spending continue, pressures to fi nd cheaper ways of delivering public services mount. This is especially true for local government, where swingeing cuts are forcing a radical rethink of what services councils can provide.
For many this shift towards diverse ‘markets’ in public services is long overdue. MPs, civil
servants and policy wonks from all political hues back the idea of more ‘open public services’. For others outsourcing represents nothing more than a betrayal of the very ethos of public services. At nef we have questioned approaches which uncritically embrace choice, competition and free market principles in public services, especially when it comes to providing human services, such as social care and youth services.
We have also challenged the bias towards large organisations and corporations, and an unquestioning faith in the effi cacy of the private sector. However, we do not reject the idea that public services might sometimes be better delivered by alternative providers, such as community groups, voluntary organisations and social enterprises, if they are commissioned well.
So how can we make sure that when public services are ‘opened up’, they privilege co-operation over competition, shared responsibilities over individual choice and people over the fi nancial bottom line or profi t? Over the past three years we have been working closely with several local authorities on better ways of commissioning and procuring of human services. Drawing on this work, fi ve principles have emerged.
1. Re-imagine what ‘open’ public services means
In the Open Public Services White Paper, it is fairly clear what ‘Open Public Services’ means. It means opening up public services to more market-based principles. But there is another way of interpreting open public services.
What if it was re-imagined to mean open to deliberative decision making with local citizens, and in particular people who use services?
Shifting commissioning from a technical process, delivered by a few local authority offi cers, to a deliberative process, involving all of us, could help to ensure that decisions about public services better refl ect our needs and aspirations. Of course, ‘our’ aspirations will not always be consensual. There will be differences of opinion and confl ict.
56 | public sector executive Sep/Oct 13
© Mark Hogan
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