An influential United Kingdom think tank says the Government should consider renationalising some outsourced services.
The Institute for Government (IFG) argues that doing so could improve their quality.
In a report following the announcement that more probation services were to be renationalised, the IFG said that bringing privately-run public services back under Government control could also make them more reliable and better value for money.
“It should consider doing so in four circumstances,” the think tank said.
The circumstances were an unhealthy or uncompetitive market; the need for flexibility to make changes to the service; a lack of commercial skills to manage an outsourced contract successfully; or a need to improve the service by integrating it with another.
The IFG noted the Government’s own admission, on announcing the return of probation services to the Ministry of Justice’s control from June 2021, that it needed to be flexible in responding to any “future challenges that COVID-19 presents”.
The report said that the pandemic crisis had forced the Government to intervene in the delivery of several services.
For example, the National Health Service (NHS) had negotiated an agreement to use the entire capacity of private hospitals to treat Coronavirus patients, while the Department for Transport has bailed out rail and bus operators.
While these were short-term measures, the IFG report said the pandemic had coincided with a growing interest in bringing outsourced services back in house.
“This interest, among both Government and public bodies like the NHS, comes after four decades of successive Governments extending the role of the private sector in Government work,” the report said.
It said there had been several success stories where public bodies had taken control of services that were previously privatised — usually where outsourcing “has not worked or has ceased to work”.
“For example, the Driver and Vehicle Licensing Agency’s decision to move its IT services back in house, saving £60 million ($A108.2 million) and several local authorities improving the quality and reliability of services by insourcing them,” the report said.
London, 21 June 2020
