IfG: improved outsourcing key to Cameron’s vision of an efficient state

26 Oct 15

Whitehall will not be able to cut spending and bring about a more efficient state unless it improves its management of outsourcing deals, Prime Minister David Cameron has been warned.

In a report published today, the Institute for Government said it expected the November 25 Spending Review to commit to additional outsourcing of public services as part of the deficit reduction drive.

However, the think-tank said that the prime minister’s pledge to make the state more efficient risked being missed if past mistakes in outsourcing deals were repeated.

It has published a guide on how to avoid problems with outsourced services. Recent failures have included Serco and G4S over-charging for electronic tagging and G4S not fully staffing contracts for the 2012 Olympics.

The Guide to Public Service Markets is intended to help providers across areas such as probation, local government, health, and employment services to assess both their services and the market. It will also provide information on the risk and possible improvements that could be introduced by outsourcing through a 33-part questionnaire.

IfG programme director Jo Casebourne said many schools, care homes, prisons and other services were now run by private providers who receive taxpayers funding.

“The public services industry is worth approximately £90bn today, and is still growing,” she stated.

“The prime minister will only be able to deliver on his promise of ‘delivering more for less’ when civil servants are able to work with these providers more effectively.”

CBI head of public services George McFarlane said the guide was a timely reminder to those charged with the stewardship of public services.

“By drawing on the experience and expertise of the private sector, which brings innovation and investment to public service delivery, businesses can help the government achieve its vision for a ‘smarter state’.

“The relationship between the government and businesses shouldn’t just be about two signatures on a contract – partnership is essential and firms want to see dialogue by default as the transformation of public services begins to take shape.”

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