Public Sector - The Golden Age of Outsourcing

With the Government’s Comprehensive Spending Review today, all will be revealed and the most savage assault on the public purse for over 80 years will be made.

With approximately £83bn per year due to be taken out of public spending between now and 2015 to plug the financial hole the UK has found itself in, what effect will this have on the delivery of services through Government departments? What of the ability of those departments to survive savage head-count and budget cuts, which in some cases will be as much as 40%?

A taste for outsourcing has been emerging within government departments with the IT sector being no exception. Earlier this year, leading analysts Seymour Pierce reported that over £80bn of public sector services are currently outsourced. With the current budget cuts, this figure is predicted to increase to over £140bn by 2015.

With government IT one of the areas hotly tipped for the slash of the sword, it begs the question; what will happen to the many talented IT staff who will be affected the cuts? Are redundancies expected to be rife? Is there another solution?

There is clearly a need for many of those key personnel; the public sector, however, is looking for a better return on investment with a streamlining of departments. This is expected to be delivered through a combination of conventional private sector outsourcing and the introduction of the transference of knowledge. The latter solution would be to harness the knowledge currently in place within public sector departments by an outsourced contractor taking over the employment of many key staff under the Transfer of Undertakings (Protection of Employment) Regulations, or TUPE as it is more commonly known.

With this in mind it is clear the private sector can offer the government many solutions to the problems of streamlining departments and continue the outsourcing trend of my many local authorities and county councils. Outsourcing will minimise redundancy and is expected to make IT departments more effective, whilst adhering to expected budget cuts. Is this a new golden age for private sector outsourcing?

Toni Kendall-Troughton
CEO – Stage