Contracts should be selected for their wider ‘social value’, for example boosting local employment, according to the report from Reform out today.
Reform noted that £284bn is spent on outsourcing services each year by the UK government and while civil servants in central government departments have improved their commercial skills, there is a “skills gap” with smaller departments and local government.
To tackle this, the report recommends extra funding to bolster training for local government as well as a new online training platform.
Reform said: “Better data and guidance would allow service providers to quantify and compare the potential social value of different contracts.”
It said that commissioners were currently “freestyling” in trying to quantify social value when commissioning contracts.
Joshua Pritchard, report co-author, said: “The way government buys services can be improved but banning outsourcing would be throwing the baby out of the bath water.”
The report said: “Building skills and expertise at both central and local government level would ensure commissioners have the capacity to conduct technical tasks such as contract design and management, and ultimately guard against expensive or ineffective procured public services.”
Meg Hillier, chair of the Public Accounts Committee, wrote in the report’s foreword: “Government cannot absolve itself of responsibility when it contracts out the delivery of services to the private sector.
“These contracts involve vast sums of taxpayers’ money and often deliver front line services to the public.”
A Cabinet Office spokesman said: “Outsourcing has been used by successive UK governments to improve our public services, enabling us to access specialist skills and innovation from the private sector.
“We have recently published our Playbook, which introduced new outsourcing measures, extended the use of the Social Value Act across all central government procurement and put in place training for thirty thousand contract managers in the civil service.”
Read PF’s feature on the slowdown in local government outsourcing.
