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Report calls for innovation for local authorities from private sector

Local authorities may be set to move against the popular trend if they pay attention to a new report. In an environment in which the public sector is apparently becoming increasingly hostile towards outsourcing, a report is urging councils to look to the private sector to gain from innovation and best practice.

The report is from the Chartered Institute of Public Finance and Accountancy (CIPFA) and it arrives against a backdrop of expectations that local authorities will provide services traditionally associated with the commercial sector.

The full report (entitled “The Commercial Imperative” and available here) is published in conjunction with Civica and you should take suitable amounts of vested interests as read. It does offer a reality check on the feasibility of, for example, social housing commitments and access to innovation that often comes better from the private sector.

Local authorities and outsourcing

One problem is that the notion of outsourcing has slowly become toxic in the public eye, since a number of high profile contracts have gone wrong. This has led to criticism from the Public Accounts Committee and criticisms of in-house skills from the government (the theory being that if we outsource everything, we lose our own skills base).

However, the best outsourcing partner companies continue to offer benefits over and above costs. Renewals such as the Fujitsu contract with the Home Office, renewed last October, demonstrate that when something works it works very well. The specialists are then able to focus on their speciality while the local authorities and other public sector organisations don’t have to become IT specialists to understand their technical needs.

A related issue is that innovation, whether in the private or public sector, requires money. And every time we take an outsourcing company to one side and ask what the public sector really wants in every negotiation, what they’re asking for under the surface talk of better delivery, the outsourcing company confirms that they’re being asked for cheaper, cheaper, cheaper.

It’s here that the quality starts to fall in many cases. With further budget constraints on the way it’s difficult to see a way around it.

Image: Town Hall, Sale