Back Office Outsourcing; a difference of view

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People often talk about “The Public Sector” as though it’s a single entity. Analyses of actual invoices paid by the public sector however shows some diametrically opposed procurement strategies. Take the expenditure since April 2012 on back office outsourcing. In Central Government expenditure has increased significantly, as shown in this chart:

Back Office Central

However, the opposite trend can be seen in Local Government. The following chart shows the spend by English Councils on outsourced back office services since April 2012:

Back Office Local

Why is there such a difference? There are a number of factors at work here, but perhaps the most interesting is the effect of the bad press that G4S and Serco received relating to outsourcing in 2014. The G4S/Serco troubles related to Central Government contracts yet the ripples affected decision making within Councils more than in Central Government. Ultimately decision making in councils is the responsibility of politicians who are reticent to fly in the face of public opinion; and rightly or wrongly, public opinion in some parts of the electrorate swung against outsourcing in recent years. Procurement decisions made by Central Government however are in the hands of civil servants more than politicians, and hence the G4S/Serco troubles had less effect on back office outsourcing centrally. It probably won’t surprise many readers that logic, value for money, and quality of service provision are not always at the heart of all procurement strategies.

Alice Watson

by Alice Watson

Alice founded Porge Research in 1999. She continues to run the business from their offices in Cheltenham.

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