The New Year always begins with a flurry of activity as all those people that decide not to take a three week holiday start sorting out their intray of non urgent jobs. One such bonus in mine is this little gem from Construction Enquirer has arrived in my in box.
I expect 2012 will see the amount of outsourcing business in local government increase as the pressure to make savings intensifies. Rochdale clearly thought that they were on to a winner when they signed a 15 year deal, but then Mouchel managed to get itself into a spot of financial bother. This will not be the first as news reaches me of another adult social care provider in trouble!
Let’s be clear on my position on outsourcing – yes it has great potential but it has to be managed properly and with a sound and independent business case. Too often I hear the words ‘we have to outsource to the private sector as they will always be more cost effective than us’. Really, based on what evidence apart from a long held mantra? And even if it is cost effective in the short term, will it remain like that in the long term as well? Clearly, Rochdale thought that it would!
As local government continues to lose some of its best officers, perhaps it is time for CEOs and Leaders to pause for thought. To coin and adapt a well known slogan, ‘an outsourcing contract is for life’. Does your authority know how to manage a long term outsourcing deal?