UNISONActive is an unofficial blog produced by UNISON activists for UNISON activists. Bringing news, briefings and events from a progressive left perspective.

Thursday, 18 July 2013

Why insourcing is the answer to outsourcing rip offs

This article in the Independent highlights the problems with outsourcing. The idea that the private sector creams off the volume work, that it can make an easy profit on, and parks the more complex work, will come as no surprise to the public sector or UNISON which has campaigned for decades against outsourcing:

However the article, based on a report from IfG ( Institute for Government) doesn’t go far enough. Its recommendations appear to be about better contract management or a slower pace of more measured outsourcing. In reality the private sector can only behave in this way because they know that with the scale of outsourcing it is now difficult for the public sector to retain capacity to deliver services directly.

So as well as monitoring what is already happening with contractors a much better route would be to start insourcing these big contracts to ensure that the Government (or public sector at large) as the purchaser is not beholden to what has become a ‘seller’s market’. If we have the capacity to deliver services for ourselves contractors are less able to extort vast sums for poor services.

Recent research by APSE for UNISON has applied this to local government contracts. The research found that key reasons for insourcing were found to be poor value for money and poor customer satisfaction with end services provided by contractors.

It is a salutary warning too for social care. As many councils have outsourced home care on the basis of spot purchased care packages there is a ticking time bomb for the complex care cases. These complex cases are either being left to the local authority - who is no longer able to absorb the costs against the volume case work because that has been outsourced to the private sector - or is entirely open to the vagaries of the market which can demand excessive fees for these cases knowing that the local councils no longer have the capacity to deliver these care package for themselves.

In short better contract monitoring or slower outsourcing is not the answer to the rip-off contract culture. Retaining local capacity to deliver direct services is.   

Anna Rose