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Could outsourcing be the way forward in the public sector?

Posted on: Wednesday, December 19th, 2012

The government's efforts to cut the UK's budget deficit have changed the way the public sector handles its finances.

It has been forced to make significant cutbacks in order to balance the books, which is no easy task when a demanding electorate wants councils to maintain or improve the quality of local services.

So what options are open to them? Well, local authorities are realising that many of the jobs they have dealt with in-house no longer need to be handled this way.

Councils are bringing in more external bodies to take on certain responsibilities, with everything from payroll to office cleaning being outsourced to a third party.

If it means public sector bodies don't need to employ people on a full-time basis to perform these jobs, it can certainly help them save money. As a result, cash can be freed up to go towards ensuring their core responsibilities are not compromised.

The government has just issued a dossier outlining all sorts of ways in which councils can cut costs and outsourcing is one of many approaches that is being encouraged.

Speaking to Sky News, communities and local government secretary Eric Pickles said: "We're talking about better procurement, collecting of tax, cutting down fraud, sharing services, sharing offices – now that will bring about billions of pounds of savings."

He stressed that public sector bodies need to change their mindset when it comes to spending, as they need to recognise it is taxpayers' money rather than their own they are using.

Mr Pickles went on to stress that greater transparency can also help councils and other state-run organisations cut costs.

He noted that his department has "led from the front" on this issue, as it publishes records of its credit spending on the internet, so voters can see precisely how public money is being used.

With the chancellor acknowledging the years of austerity will go on for longer than was originally thought, it is certainly in the best interests of councils to see how options such as outsourcing various roles could be advantageous.