Rejecting innovative and cost-saving outsourcers is an extreme move dripping in dogma

Written by Matthew Fell on 9 April 2019 in Opinion
Opinion

Only by working better together can industry and government restore public trust in public-private partnerships, writes Matthew Fell

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We now know there are more than 16,000 civil servants working on Brexit – the UK’s biggest peacetime challenge in recent history – which is having “profound effects on Whitehall and Westminster”, according to the Institute for Government.

With that in mind, it’s no surprise some areas of domestic policy have taken a back seat. As just one example, the Department of Health and Social Care has been renamed, but there’s scant sign of the green paper that prompted the change. Yet while the opportunity cost of Brexit grows daily, outsourcing is one area where ministers and civil servants have made real progress.

Given that the government spends nearly a third of its annual budget in this way, improving public procurement is rightly high on its agenda. Partnerships between the public and private sectors play a vital role in driving prosperity across all UK regions and nations. They support frontline services including schools and hospitals, together with future-proofing our transport and energy needs. But recently their efficacy has been called into question amid stories of contract failure and market instability.


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The reality is that the vast majority of public-private partnerships are successful, delivering jobs, supporting innovation and providing Britain with a competitive advantage. And, since the collapse of Carillion, ministers and civil servants have been working tirelessly to improve public service delivery by focussing on long-term outcomes and social value rather than short-term costs.

In February, much of this work culminated in the publication of the Outsourcing Playbook, which outlined steps both government and industry can take to ensure partnerships between the public and private sector deliver for the long term.

This included ensuring risk is managed more collaboratively to encourage greater diversity and sustainability of public services markets. It also advocated making better use of pilots to ensure public money is spent wisely over the longer term, providing policymakers and businesses with space to learn what works.

The playbook’s efforts to encourage more commissioners to publish pipelines can also help provide greater certainty to firms large and small about forthcoming opportunities, helping SMEs add greater diversity to the existing marketplace.

Clearly, there is still room for improvement – as highlighted by the select committee inquiries following the collapse of Carillion and, more recently, the inspectorate’s report into probation services. Indeed, the Transforming Rehabilitation programme serves as a reminder of what happens when poorly designed contracts are combined with complex service provision and an untested market. Introducing such reforms at pace meant commissioners failed to accurately predict caseloads, leading to financially unsustainable contracts. The model also prevented charities from bringing their significant expertise to bear on, for example, providing support with drug or alcohol addiction. There is plenty of scope to further improve probation service delivery, and the private and third sectors have much to contribute in future. A better way ahead lies in extensive market testing and thorough evidence evaluation.

More generally, there are still too many examples of poor commercial behaviours across government, leading to ineffective partnerships with its suppliers and unsatisfactory outcomes for members of the public. Both the CBI and Reform have recently set out a number of recommendations on how this can be achieved.

Ultimately, only by working better together can industry and government help restore the public trust in public-private partnerships and make them work better for all concerned. While it is the current policy of Her Majesty’s Official Opposition to reduce the involvement of business in the public sector, this approach ”risks losing the benefits of outsourcing where it has worked”. Rejecting the innovation, investment and cost savings suppliers can bring to vital public services and infrastructure is an extreme move devoid of evidence yet dripping in dogma.

The best way to solve some of the biggest challenges facing society today is to harness the very best that the public and private sectors have to offer. By working collaboratively, government and industry can ensure improvements can be delivered without delay.

Finally, we must guard against inaction. Brexit is likely to remain a red light on senior civil servants’ dashboards for some time to come. And the need for the government to make progress in other areas of public policy is pressing.

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Matthew Fell
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Matthew Fell is chief UK policy director for the CBI

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