Outsourcing and Shared Services

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Collaborative partnership working is a key contributor to driving efficiencies and tackling budget pressures in the current economic climate. Government must achieve good quality public services that are valued by their customers, and ensure that efficiencies are applied consistently and proactively across the whole public sector and across all services. The fundamental purpose of public sector organisations is to deliver efficient and effective customer orientated services, so the concept of partnership working has never been more important or relevant.

This event will look at the arguments for and against partnership working – whether using a shared service model, outsourcing to another part of government or outsourcing to the private sector. As is well known, there is a real terms reduction in the Scottish Budget, which means that public sector organisations are having to do more with less money. It also means that when discussing service delivery models any debate must begin with an acknowledgement that the status quo is no longer tenable and that alternative methods must at the very least be explored thoroughly in light of the Independent Budget Review’s clear message that efficiencies alone will not suffice in meeting the necessary cuts.

Speakers will discuss the benefits of partnership working, and some of the shortfalls. All over Scotland political leaders are driven by an understanding that change must happen now. In Orkney, the local council is looking at the concept of a single public authority, and in Clackmannanshire and Stirling, the local authorities have come together to combine some of their efforts in education and social work. This goes beyond the more widespread sharing of back office functions and is an example of how front line services can be integrated together across local authority boundaries.

Perhaps even more revolutionary is the idea that Scotland might have a single, unified police force. Proponents in favour of this idea would argue that significant and recurring costs savings can be made by and that public safety can be improved. The fire services have also been reported to be under consideration for a merger into a single, unified body. These developments lend weight to the premise that collaborative partnership working will be at the forefront of efficiency-led initiatives going forward into the next decade.

One of the major challenges facing public bodies who are considering entering into a partnership agreement is ceding accountability. This loss of centralised control, when combined with the pressures of an electoral cycle, can mitigate against the perceived risk that authorities might be willing to take. A study of local authority leaders last year showed very clearly that whilst 85% of respondents anticipated increased levels of collaborative working or shared services between local authorities, fewer than half of those surveyed think local authorities will adopt joint venture arrangements with the private sector, outsourcing of services on a service-by-service basis, or large scale outsourcing. The most commonly cited barrier was a loss of accountability.

All this raises some interesting questions. Why are local authorities more open to joint ventures between themselves? What are the most common reasons for excluding private sector companies from joining a shared service? Are councils moving tacitly towards quasi-boundary reorganisation? Would serving notice of an intention to outsource a function drive competition and unlock creativity?

This Holyrood magazine event will look at several of the partnership models being used across Scotland and ask the really important questions of all our contributors – what savings have been made and more importantly have outcomes and service delivery improved?

If you have any queries or require further information on attending this event please do not hesitate to contact karen@holyrood.com or telephone 0131 272 2175.

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