By Lucy Phillips
29 September 2010
Doubt has been cast over the scale of savings Suffolk County Council could achieve by outsourcing almost all its services.
Last week, the county council announced plans to cut 30% from its £1.1bn annual budget by commissioning most of its services from private companies and social enterprises. The 27,000 strong-workforce would be considerably reduced over the next few years.
But Paul Grout, professor of political economy at the Centre for Market and Public Organisation at Bristol University, today told Public Finance that the savings target was unlikely to be met.
‘It strikes me that the 30% gains are too much. If you think by outsourcing everything you are likely to be saving a third of your budget, it seems very difficult.’
He said that areas such as waste collections were relatively simple to outsource and had generated savings in the past. But for any service involving ‘people and complex contracts’, such as social work, it would be harder to make these kinds of savings.
‘There are a heck of a lot of local authority activities where you will not be able to outsource by any means,’ he added.
Grout said that Suffolk would need to involve volunteers ‘in a big way’ in its plans, many of whom would be ‘doing something for free that was previously paid for’.
A Suffolk spokeswoman today said that ‘no firm decisions’ had been made and the council was still ‘exploring different options for the future delivery of services’. She added: ‘We will be beginning discussions with the people of Suffolk so they can be involved in the shaping of these services soon.’
On announcing the council’s ‘new strategic direction’ last week, the Conservative leader, Jeremy Pembroke, said the proposals were ‘made with consideration to the financial deficit in the public sector and the coalition government’s priority to reduce the deficit and the size of the state’.
He added: ‘The coalition requires lesser government and a bigger society, and Suffolk County Council has responded to this charge.’
Unions have condemned the move. Unison general secretary Dave Prentis said: ‘This is not the way to run council services.
‘Leaving vital services like child protection, home care and support for young people to the vagaries of the market is very dangerous. Services will be sold off to the lowest bidder, starting a race to the bottom. People using local services, and those working to provide them, will pay the price.’
