New research from the Association of Public Service Excellence (APSE) has found that the ‘insourcing’ of local authority services is growing strongly, with 73% of survey respondents suggesting they were in the process of insourcing a service and 45% having already done so.
In its report Rebuilding Capacity: the case for insourcing public contracts, APSE said that both the compulsory competitive tendering regime imposed by Conservative governments in the 1980s and its Labour successor Best Value had failed to address the loss of direct control, loss of flexibility and the complexities of managing a third party relationships inherent in outsourcing and so councils were increasingly bringing services back in-house.
The research found that while outsourcing was driven by promises of savings and efficiencies “ironically austerity has increased the need for further efficiencies and improvements to service quality, which have in turn all become main drivers to insource services”.
Insourcing was on the increase but not driven by ideology, the report said, with services of all kinds across council of different political controls being taken in-house.
It said: “Insourced contracts provide service flexibility and the ability to allocate resources where they are needed; they are supporting local council endeavours to buy locally and to influence employment and environmental standards in the local area.”
The report recommended that insourcing should be considered as a viable delivery option when appraising the future of outsourced contracts and be viewed as a form of innovation in both service delivery and resource allocation.
Insourcing should embrace the principles of good governance, transparency and accountability over locally provided services and be used to support local economies and the local environment through jobs, skills, supply chain management and local spend it added.