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

Temporary Agency Workers – not so cost effective after all

Employing temporary agency workers has always been seen as an alternative to permanent employees in the IT sector. Companies can expand and contract as the work load dictates, with the slack taken up by contractors, now referred to as Temporary Agency Workers. Often, the employer sees agency fees as being high, without value and sometimes wholly unacceptable.

Employers often feel that a contractor takes a period of time to come ‘up to speed’ and having eventually grasped the fundamentals of the project and the company ethos, then leaves to pursue another project. Regardless of how ‘up to speed’ the individual may be, this perception by employers reflects negatively in the terms and conditions for temporary agency workers, which may be inferior to that of permanent staff.

Now the new European Temporary Agency Workers Directive, which was aired by Parliament in January 2010, is being reviewed before coming into effect on 5th December 2011. This new piece of legislation is being implemented to protect the rights of such workers. Being criticised for being complicated, it is seen as being vague and ambiguous. However, it is here to stay, so it is imperative the directive is totally understood and adhered to.

How will this new piece of legislation affect the employer and the employee alike? The main point is that after 12 weeks on an assignment, agency workers will be given equal treatment and conditions of employment as permanent employees.

That means the benefits package (pay, pension, holidays and health insurance) received by an agency worker will have to be on a par with that of a permanently employed member of staff. And then the Temporary Agency Worker leaves for the next project, never to be seen again.

Is there another way? We at Stage like to think so. Look out for the next blog.