Magazine article Public Finance

Bringing It All Back Home

Magazine article Public Finance

Bringing It All Back Home

Article excerpt

If one thing Is apparent in these turbulent times, it is that principles we have had for decades are no longer sacrosanct. If the government can bail out banks following catastrophic market failure and introduce a ?20bn Keynesian-style fiscal stimulus seemingly overnight, market-based public service models that have been adopted unquestioningly must surely be reconsidered. And fast.

I was one of the participants in the recent Public Finance round table debate on outsourcing, which opened up burning issues for the future of public service delivery. As the account of the event ('Better out than in?' January 9-15) reflects, the discussion questioned whether the financial crisis has turned on its head 30 years of conventional wisdom that the private sector knows best.

Just a few months ago, outsourcing was the prevailing public service paradigm, with DeAnne Julius's review of the ?79bn 'public service industry' recommending yet more of the same. But access to capital has now silted up and mergers and acquisitions mean a few big players will exert a vice-like grip as smaller contractors go to the wall. As times get tough, evidence of the failure of the market to meet public service needs is apparent.

And yet one word was all too conspicuous by its absence from the round table debate. That is 'insourcing'. Amid all the contemplation and desperation, there has been scant acknowledgment of the obvious solution of returning services in-house to meet the unprecedented challenges the public sector faces. And yet, evidence shows that it makes a great deal of sense.

Resident satisfaction ratings with the London Borough of Southwards street and estate cleaning services have rocketed from 30% to 70% since they were brought back inhouse four years ago. OIdham Metropolitan Borough Council's insourcing of its waste services has enabled them to be combined with parks and street cleansing and to achieve a closer link between service provision and major targets, such as those in Local Area Agreements.

Grounds maintenance services in Maidstone Borough Council have become more resource-efficient as a result of insourcing. These are but a few of the many examples that mean local communities are receiving higher quality services at better value for money as a result of insourcing.

Research by the Association for Public Service Excellence, to be published this month, charts the growing phenomenon of bringing council services back in-house. Focusing on more than 50 examples, it has found benefits including greater accountability, enhanced performance, more flexibility and increased public satisfaction. …

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