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The APSE’s case for insourcing public service contracts
The Association for Public Service Excellence (APSE) has taken the bull by the horns and commissioned some research into the biggest question in the sector: what’s behind the surge in “insourcing”, with councils bringing public service contracts back in-house? Here’s the framing pitch for the report from their website:
For many years the narrative of public service delivery has been dominated by big policy ideas of big government; often a narrative driven by the holy grail of high quality but cost-effective public services. By mimicking market mechanisms public services, it was assumed, could be delivered more effectively and more cheaply. What is now clear is that the over-simplification of public service delivery into commodified units, capable of being delivered by the market, has led to increasing market failure.
This research therefore explores the growing phenomenon of ‘Insourcing’; bringing back ‘in-house’ the delivery of services. It takes a particular focus on UK local government services and questions the drivers for this increase in insourcing. It finds that insourcing is not a passive reaction to contract failures but is increasingly viewed as a proactive response to the public policy pressures facing local councils, not least the ongoing impact of austerity.
And here are the key findings from the executive summary of the report itself:
* Whilst outsourcing in many cases appeared to be driven by promises of savings and efficiencies ironically austerity has increased the need for further efficiencies and improvements to service quality, which have in turn all become main drivers to insource services.
* Insourcing is on the increase but it is not driven by ideology. It has increasingly been seen as an option by councils under different political control or leadership styles. Whilst major contract failures like the collapse of Carillion has focused minds its contribution to the volume of insourcing in local government is of less significance than those contracts already being insourced by local councils.
* There are a myriad of contracts by service type, by price, and by geography, that are being insourced. There is an increasing awareness within local government about the value of local council services to support local economies and local businesses; better services for residents and business and more cohesive approaches to directing resources to where they are needed.
* Insourced contracts provide service flexibility and the ability to allocate resources where they are needed; they are supporting local council endeavours to buy locally and to influence employment and environmental standards in the local area.
* Insourcing reinstates the ability for elected local councillors to determine what resources should go to where. Outsourcing is found to detach the cable from the local lever. Insourcing restores the cable and puts control back into the local democratic institution.
That’s a pretty strong argument, and as the report makes clear, it’s happening, and happening quickly. It might well be argued that there’s still a strong case for outsourcing in public services — but what’s clear is that, if there is such an argument, then it’s been a long time since anyone made it believable, whether in word or deed. So if you’re hoping to make it again, this report is a summary of the reality you’re up against — so download it and get to studying.