Labour outsourcing reforms ‘already being done’

22 Jul 19

Labour’s proposals for an overhaul to public service outsourcing are “redundant”, PF has been told.

Shadow chancellor John McDonnell called for an “insourcing revolution” over the weekend in a speech at Unison’s London office, saying a Labour government would ensure local authority service contracts where automatically reviewed when they expired.

But a think-tank researcher has suggested to PF the government is already seeking to change the outsourcing model.

A report from Labour, also released over the weekend, said a Labour government would legislate to create a “presumption” that service contracts will be brought back inhouse and delivered by the public sector unless certain conditions were met.

But Josh Pritchard, researcher at the Reform think-tank, told PF: “The proposals seem a little bit redundant and it looks like Labour are trying to claim credit for things which the Cabinet Office are already trying to do.”

Pritchard pointed to the Cabinet Office’s recent consultation social value in government procurement, which seeks to improve how government accounts for social value when awarding contracts.

“There are problems with the current outsourcing model, but we should be looking at improving those, rather than just abandoning it at the first sign of trouble,” he added.

Pritchard expressed concern about those working in the outsourcing sector and what they would mean for them.

He said: “We are talking here about typically low-skilled workers who are coming from less economically advantage areas in the UK. What happens to them? Is the council going to hire them and bring them inhouse to deliver the same services?”

There is “a lot of very generalised statements” in Labour’s proposals that would need to be explained, he added.

Pritchard said that the local government sector will “broadly be in favour of bringing services back in house,” but added that “a lot of the general public honestly don’t care who delivers their services, as long as they’re good quality.”

McDonnell, who unveiled the proposals with shadow local government secretary Andrew Gwynne, suggested councils would benefit from a “model contract” and access to the Government Legal Department to get help on contract management.

He cited research by the Association for Public Service Excellence that found 73% of UK authorities were in the process of ‘inhousing’ public services.

“It’s time to end the outsourcing scandal, which has seen private companies rip off the taxpayer, degrade out public services and put people at risk whilst remaining wholly unaccountable to the people who rely on and fund these services,” he said.

Last week, the Cabinet Office called on the public sector to “lead by example” on paying outsourced suppliers.

Read PF’s investigation into local government outsourcing habits one year on from the collapse of Carillion.

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