NOA asks Prime Minister to ‘come out’ as a supporter of UK’s second biggest industry
As we await the Nash vs. Barnet Council Judicial Review, the National Outsourcing Association believes that the public mistrust of outsourcing is due to an informational imbalance brought about by fervent media criticism and elongated hyperbole when a deal goes wrong. Contrast this with restricted access to news / statistics of public sector outsourcing when it goes well, and the information gap becomes clear.
As outsourcing is ambient across government, the NOA believes that Mr. Cameron is, on the whole, a happy customer, and urges him to come out and say so.
Kerry Hallard, CEO of the NOA, has sent him the following missive.
Dear Prime Minister,
Re: the landmark judicial review of the One Barnet project, where Barnet Council’s right to create efficiency gains by outsourcing back office services to Capita has been challenged by a small proportion of its residents, it is time that Whitehall acknowledged its own part in this sorry situation.
Mr Justice Underhill was quick to point out that distaste for ‘back office outsourcing’ was a political matter, of limited consequence to the actual users of a service. Yet the distaste for public sector outsourcing rides so high – this is because a widespread lack of championing success, while the occasional failure finds itself emblazoned across the front pages for weeks. Central government needs to take a stand, and speak up on behalf the companies who are providing their services, and delivering a high degree of customer satisfaction and reducing costs simultaneously.
For the heart of the Nash vs. Barnet case is the misguided notion of “whether an outsourcing company which expects to maximise the profits it makes is really going to deliver the same or better quality of service as the in-house provision.” This highlights the general mistrust and misunderstanding around outsourcing that cannot prevail if the public sector is to reach its efficiency targets, which will only get harder in light of further spending reviews and expected cuts.
The government trusts outsourcing. Its prevalence within the public sector must mean that you are a satisfied customer. Some of your outsourced contracts have been repeatedly renewed, running for 20+ years. These contracts are never spoken about. Outsourcing success must be championed, not swept under the rug.
Government must also be seen to support the UK’s major industries - outsourcing is the second biggest aggregate employer in the UK, and with a turnover of £199bn, the fourth greatest contributor to GDP. The modern business environment is an outsourcing economy, where the majority of firms focus on leveraging external capacities, capabilities, knowledge and skills – the public sector chooses to leverage these competences also, but quietly, almost surreptitiously. Why is that?
The government should highlight that private sector service delivery is not privatisation, and that public sector agencies retain control of ensuring standards are met. Accountability is a core aspect of outsourcing – one that the media frequently chooses to turn a blind eye to. Speaking out about how the government’s successful outsourcing arrangements work in practice would help assuage the negative public perception around outsourcing. NOA research shows they mistrust because they misunderstand. ‘They’ don’t really know what outsourcing is, but they still find it in their hearts to hate it.
We beseech you to speak out about how outsourcing works, and how it fits into your strategy for rejuvenating the economy. Outsourcing helps you reduce your costs. But austerity isn’t the answer on its own. It never was – still, money saved by through efficiency gains can be more prudently invested elsewhere: infrastructure, shovel-ready projects, boots on the ground. More efficient spending is paramount: spending the right way will be what recalibrates the UK economy toward a period of growth. That means investing in your key industries, not just financially, but vocally.
A little support would go a long way: the UK business services community leads the world in terms of sourcing skills, experience and best practice. We are the global strategic hub – knowledge outsourcing is a growing export, a huge opportunity for the UK to boost jobs and wealth that needs to be harnessed to best effect.
You’re a PR man at heart Mr Cameron, as a former Director of Corporate Affairs, you know all about managing reputations. Yet you’ve let the reputation of an important policy of yours, Open Public Services, slide into disrepute. This has been due to some alarming failures. Thankfully, these have been few and far between – it’s time to provide a counterbalance, demonstrating to the UK public and beyond, that the good by far outweighs the bad.
Yours sincerely,
Kerry Hallard
CEO, National Outsourcing Association