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Article Article April 26th, 2018
Finance • Delivery

*Cue another heart-breaking story of government outsourcing gone wrong*

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Is #outsourcing still suitable for so many UK public services or should citizens have a louder voice? @_Rose_Katie investigates...

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In #Sheffield, local citizens are in uproar about @SheffCouncil's decision to outsource the management of its trees to the private sector

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As part of our #FindingLegitimacy project, we have found global examples of governments giving citizens a voice in decision-making

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30-second summary

  • The UK's outsourcing market has been hit by a series of recent scandals, all have which have helped shine a light on government's reliance on this method of service delivery.
  • More than £250bn of UK central and local government money went to private suppliers in 2015/6 - about a third of total government spending.
  • Citizens deserve a voice in this debate. These decisions are made about theirs too; it's their city, their roads, their prisons, their schools, their trains, their homes.

Does the headline to this piece sound familiar? It's how every story about the UK government's use of outsourcing seems to start at the moment.

There's no doubt that there have been some spectacular failures in recent months. Locally outsourced contracts have been partly blamed for the Grenfell tower disaster, one of the UK government's biggest suppliers Carillion has collapsed, and the share price of another huge supplier, Capita, has plunged - sparking fears that another outsourcing scandal was looming.  These are just a few examples - there are plenty more.

It's hardly surprising, then, that government outsourcing has been thrown into the spotlight. And rightly so. More than £250 billion of UK central and local government money went to private suppliers in 2015/16 - about a third of total government spending. Of course, when things go so catastrophically wrong, taking so much of people's money with them, we should question the way we do things.

Last month, the UK's Institute for Government (IfG) held an event entitled When does government outsourcing work? Many of the speakers called for more transparency in public contracting and a new code of conduct, greater accountability, more honesty from both the government and suppliers about what's involved and what can be achieved, and better alignment of contractors' incentives. Yes, yes, yes and yes. Please.

The panellists also examined the necessary conditions for outsourcing to work. They discussed the structural advantages of using existing platforms that enable outsourcing at low marginal costs.

Solid recommendations all round. But it seems to me that we have forgotten someone in this debate. Government contracts don't just exist between government and suppliers, bouncing back and forth between them like a ping-pong ball. They are just two actors in a chain, a chain which ends with the citizen. With the people who actually use the services provided. Yet no one seems to be involving them in these debates or decisions about when outsourcing works. Shouldn't at least part of this be about asking citizens “when does outsourcing work for you?”

We need to involve citizens in our decision-making around outsourcing and its consequences

In 2012, Sheffield, a city in the North of England, was one of the greenest cities in Europe - with more trees per person than any other city.

However, in that year Sheffield City Council signed a 25-year £2.2 billion contract with a private company, Amey, to upgrade “the condition of our city's roads, pavements, streetlights, bridges and other items on or around our streets”. As a result, roadside trees were effectively privatised until the late 2030s, and the culling began.

For many Sheffielders, the trees are part of why they love the city. Amey had cut down a lot of them before people even realised that widespread felling was taking place. Now the council has a full-scale protest on its hands: citizens are just not willing to sacrifice their city's trees.

These protests are just one example showing that citizens have a side of the story to tell in the current outsourcing debate. If they had been involved in the council's decision to privatise their roads for 25 years and had debated what that would mean, Sheffielders would have got to have their say and decisions could have been co-owned. Yet no one asked or involved them, or even told them, which meant they only found out about these decisions when trees started to be chopped down all over their city.

Citizens understand that governments have to make choices

We all accept that choices have to be made. Civil servants and politicians do not hold a monopoly on the ability to understand that trade-offs have to happen when money is limited. Citizens understand that sometimes outsourcing makes sense and efficiency has to be a priority.

But the people of Sheffield are not protesting because they have been forced to make a choice and aren't happy with doing so. They are protesting because they were not involved in the decision to outsource. They were given no say in what was to happen to their city.

As part of our #FindingLegitimacy project, we have found examples all over the world of governments giving citizens a voice in their decision-making. In making their actual decisions, too, not just one-off citizen consultations with results that don't go anywhere. So it can happen.

One of the best examples is how the Chilean government wanted to involve citizens in the formulation of their new constitution. Their efforts resulted in more than 8,500 self-organised local conversations about what the new Chilean constitution should look like. We need to involve citizens in government decisions about outsourcing, or protests like those in Sheffield will keep happening and the UK government's legitimacy will continue to be in jeopardy.

We must talk to citizens before flipping the switch on outsourcing

In recent months, it seems the tide might be turning. Outsourcing is being questioned. The UK government has been burnt by some very bad experiences and is now thinking hard about the future. There has even been some emergency “insourcing” starting to happen, with local UK councils bringing local service contracts back in house in response to the collapse of Carillion.

This is, of course, an important discussion, and the recommendations from the IfG panellists on how to change the relationship between government and suppliers provide a valuable piece of the puzzle. And we might decide from all of this that the UK government needs to outsource less.

But we cannot, and should not, decide the question of when outsourcing works without talking to people and asking them “when does outsourcing work for you?” We need to have genuine conversations and dialogue with citizens to really listen to what they think and involve them in decisions. And that doesn't mean the UK government adding to the pile of consultations that have been held that have never come to anything.

Citizens deserve a voice in this debate. Fundamentally, these decisions belong to them as well: it's their city, their roads, their prisons, their schools, their trains, their homes. We need to have genuine conversations with citizens about the often difficult choices government have to make. We need to start talking to each other.




Written by:

Katie Rose
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