More than a third of local authority services will be outsourced by 2014, council chiefs say, up from 20% average outsourcing levels today.
This is among the findings of research carried out among chief executives and directors in 101 local authorities by YouGovStone on behalf of Interserve.
On average councils are expecting to make cuts of 20% by 2014, with a third anticipating 25 % or more and one in ten targeting over 30%. However, four out of 10 local authorities do not yet have a strategy to manage their spending cuts.
The research revealed:
- Councils expect to increase outsourcing levels by 70%, moving from 20% average outsourcing levels in 2011 to 34% by 2014.
- 84% of councils believe outsourcing has been successful in achieving savings, however only 58% believe it is critical for them to achieve their targets.
- 44% of councils stated political concerns as a barrier to outsourcing; 28% identified a lack of capacity and 27% a lack of skills for delivering change.
- 75% of councils believe the citizen’s voice will be fundamental to future delivery models and 76% believe more local control will enhance local authorities’ ability to meet their targets.
- 63% of councils believe that partnership is the most important factor in a public private relationship; lowest cost doesn’t make the top five.
- 25% of councils don’t expect to meet their savings targets fully by 2014 and 40% have no approved strategy in place to achieve them.
- Only 8% of councils look to a consultant to start their procurement process, whilst 20% look internally to local government best practice rather than wider service-specific expertise.
Interserve chief executive Adrian Ringrose said: “This research identifies the severity of the 2014 financial challenge and highlights a reticence among local authorities to tackle some of the larger and more publicly-focused areas of spend. Delivering savings to the extent necessary will require more radical change than simply increasing outsourcing levels.
“Councils clearly indicate that they are interested in procuring best-value solutions rather than adopting a purely cost-based approach, yet they don’t appear willing to undertake a full review of their service delivery. The opportunity exists for them to make fundamental reforms for the benefit of their communities; ultimately, the future is going to be defined by partnerships between the public, private and third sectors working together to help redefine delivery and instigate a positive change.”
Mark Fox, chief executive of privatisation lobby group Business Services Association, added: “Interserve’s important research has allowed us to understand better the attitudes towards outsourcing of councils up and down the country. Although we have long suspected that local officials - those who are charged with finding spending efficiencies - recognise the value of outsourcing, this research has confirmed it. It is clear now that the greatest barrier to reform that we face is political preconceptions.”
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