Public sector outsourcing doubles, but still not problem free

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The Financial Times reported recently that public sector outsourcing doubled over the last ten years to be worth £80bn. However, this growth has not been problem free by any means.

The rise and fall of public sector outsourcing has always been popular in the media and at this week’s NOA Global Sourcing Day it was a much debated topic. Despite the panel concluding that the public sector has learnt a lot from previous engagements in the outsourcing market, relationship breakdowns such as Fujitsu/NHS show it still has a long way to go.

Although there is evidence of maturing in certain aspects of public sector outsourcing, there needs to be an understanding of the need for a deal structure and commercial terms that avoid the ‘bid low then increase’ situation. This can be done by looking beyond the procurement process and understanding the need for a sustainable and predictable deal that ensures that the contract is signed, managed and contained within agreed parameters.

If the public sector continues to undertake poor contract negotiations or rushed deals, ultimately taxpayers will foot the bill.

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