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Outsourcing success depends on conditions, says expert

28 October 2010

A local government officer has said public sector managers must be discouraged from viewing outsourcing as a simple way to deliver savings.

In a letter to the Financial Times, Christopher Loy warned of the risks associated with outsourcing and said major exercises of this nature will only succeed if certain conditions are met.

He said public sector departments should establish that their existing in-house provision is inefficient before going ahead with a decision to outsource any services.

"The benefits of outsourcing must outweigh the costs of a procurement exercise and managing the contract," Mr Loy told the newspaper.

An alternative course of action would be to keep the service in-house and attempt to deliver efficiencies by applying "best practice from the private sector", he added.

Last week, chairman of the National Outsourcing Association Martyn Hart urged public sector leaders not to view deals with external consultants and contractors as "a quick fix".

He said completing a process of due diligence is necessary before any outsourcing deal is signed.

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Categories: Public Sector

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