Outsourcing: where do you draw the line?


Privatisation is really bad, isn’t it?! I mean you don’t have to look far to find horror stories of where the private sector has raced to the bottom and is delivering shoddy, shocking services whilst creaming off a nice fat profit. What’s not to dislike?

And so we must resist all attempts to engage in commissioning which is always the start of a slippery slope. Look at where we have now got to with the NHS: it began with GP fundholding (Major government) and then we made all ok with 57 varieties of the ‘internal market’ (Blair government) followed closely by Foundation Trusts (Brown government). And now what do we have under Clameron…? Something even worse than a dog’s breakfast – a piranha’s one perhaps.

It is crystal clear: all erosion of public not profit provision must be resisted at every quarter. The Tories from tea party blue to yellow wash believe in ‘public bad / private good’. Our response must clearly be ‘public good / private bad’.

Must it?

Or should we take a more nuanced approach? I think we should because a) we always have – the public services have always outsourced some of their service needs and b) resisting all outsourcing as a step towards privatising everything that the state does plays into the hands of the Right who can so easily label us of being unworldly, unbusinesslike and opposed to efficiency improvements.

Now there will be some reading this who will already be categorising me as some kind of bourgeois Blairist fool who has been duped into believing the marketisation agenda. I would, instead, contend I am on the pragmatic Left with a very large slice of outsourcing scepticism. (My recent article in the Guardian sets out some of the severe difficulties I see when politicians and staff who pursue commissioning with naïve enthusiasm.)

I do think there are many occasions where outsourcing or even (to use a current buzz word) ‘co-sourcing’ with the private sector can deliver better outcomes and less overall cost to the public purse. I also think there are many more occasions where such outsourcing is not only bad in the long term, it is also very bad in the short term: so called savings are nothing short of financial finagling and outcomes are not even considered.

To examine a live example in a service I know fairly well: policing. Vast amounts of resource are spent on transcription of statements from analogue cassette tapes. Indeed the whole set of procedures around the prosecution of offenders which involves the CPS, Courts and Police (among others) is riven with antiquated and highly inefficient systems.

Now if I were an incoming Police and Crime Commissioner elected on the basis of improving efficiency, getting police officers out onto the streets, bringing more offenders to justice – and generally improving community safety, I would want to look at every possibility to do this. Say my force spends £2m worth of staff and police officer time on these antiquated systems and I have no spare cash to invest in improvements. And so I examine the option of bringing in a specialist private sector partner who has a gizmo to transcribe recorded speech into text. I put out a tender and I end up spending £½m on a new piece of kit. The equivalent of a £1m in staff and officer time is saved with the new approach and this time is redeployed to other more beneficial activity. The £½m price tag comes from a variety of sources including some voluntary redundancy and reductions in payment to contractors.

OK these are simple figures and the whole system economics (taking into account all the costs and benefits) would be need to be worked out. But say they were and the overall benefit is significantly better than the current state of affairs – should we not even consider this because it is outsourcing to a private sector company?

Whenever I get the chance, I challenge outsourcing enthusiasts to say what their limit is. Would they, for example, privatise the army? How about putting the judiciary out to tender? What about outsourcing the Falkland Island’s government to a branch of the Argentinian government? Selling off GCHQ to a Russian ‘firm’? And so on. Usually I find they have a limit: Sir Digby Jones, for example, said in response to my line of questioning at a Probation Association conference some years ago that no service should be privatised if people could end up being killed. He was thinking of the armed forces but I wonder what his view now is of plans to outsource police patrol? I guess not many coppers get killed…

However, I think it is equally important for us outsourcing sceptics to know our limits too. Are we so sceptical that no form of outsourcing is ever going to be acceptable? But on the basis that such an extreme position is not tenable – then I believe we must have a closely argued case for when outsourcing is not only acceptable but a positively good thing to do – and when it is not so. What conditions have to be present? What calculations have to be made? What principles must not be infringed? What ethics must not be overlooked? And so forth.

In this way, I believe, we strengthen (not weaken) our arguments against damaging outsourcing strategies. By being clear that we are for good outsourcing, we will be better able to counter bad outsourcing.

As the debates around the Police and Crime Commissioners increase, it will be our task to explain to the electorate that the outsourcing enthusiasts from the Government parties could well end up selling their local bobby down the river to the lowest bidder.

And we must also explain how our approach will be a more considered, long term and ethical approach to the use of scarce resources.

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