Its report, which was commissioned by the Children’s Services Development Group, an alliance of independent providers, identified the critical success factors for outsourcing in children’s services.
Among them are for local authorities and central government to adopt a pro-active approach to outsourcing, establish a strong and transparent relationship between the commissioner and provider, and agree outcomes.
However, outsourcing is often viewed with suspicion, the report notes, particularly if it is achieved through for-profit providers, but does have the potential to help local authorities deal with pressures and secure better outcomes.
Demos also found that commissioners that use data strategically use of tended to secure better outcomes. It encouraged local authorities to collect and use datasets pertaining to the residents in their areas, the true cost of delivering services, and on the outcomes of young people.
In terms of pitfalls to avoid, the report urged authorities to be mindful of the “price-driven environment”, caused by budget cuts, in which commissioners made decisions on the basis of cost rather than quality. Also, outsourcing was often undertaken in the context of failure, which does not create the right conditions under which it can succeed.
CSDG chair Andrew Isaac said the findings of the report confirmed the “pressing need for a proactive and constructive partnership between local authorities and providers of children’s services at a time of stretched budgets and growing demand”.
He criticised the “opaque and often ideologically driven approach taken by many local authority departments” which he said was “counter-productive to achieving positive outcomes for the young people in our communities”.
“There is significant expertise and resource, as well as high quality, specialist provision that can be harnessed to deliver value for money and meet the needs of vulnerable children,” he added.
Demos researcher and report author Simone Vibert said outsourcing should be done strategically and under the right circumstances.
“Commissioning is an art, not a science, and local authorities need guidance and support to do it well. Looking to domestic and international good practice is an important way to learn from 'what works' in children's services and avoid common missteps,” she said.
