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Outsourcing questioned – again

Today’s Guardian has a piece by columnist Polly Toynbee in which the future of public sector outsourcing is called into question once again.

The arguments are persuasive. Staff at a museum in Britain were among those contracted out and their numbers have dwindled as has the amount of cleaning they have time to do. Jobs remain under threat. Carillion screwed the contract in question up, Pricewaterhousecoopers is taking a lot of money to sort it out and there has been no evaluation of whether or not these outsourced contracts offer value for money or not in the first place.

It all sounds pretty damning. Until you pick it apart a little.

First the substantive parts. The fact that there has been no evaluation of the long-term value of compulsory competitive tendering for outsourcing contracts is indeed an embarrassment and something the government should sort out as swiftly as possible. This isn’t an anti-outsourcing statement; managers of outsourcing businesses work on metrics and if they’re not delivering value they’ll want to know just as much as the client.

There are some odd points in the piece as well, however. First, the comparison of the PwC executive’s hourly wage with the national minimum wage. Yes it’s very different but surely no senior executive is going to be on the minimum legal amount permissible? This is the classic ‘straw man’ argument, in which a ludicrously exaggerated view is put forward to justify a premise.

The biggest point for us, though, has to be that this is about Carillion. Another defunct outsourcing company, Shield, is mentioned to back the point up. The thing is, these are failed companies. Nobody is saying ‘look at these organisations and how well they are doing’ – they are text book examples of how not to do it.

There is a lot to be learned from how these businesses went under and whether their employees now have adequate protection. It may indeed have implications for the structure, oversight and possibly existence of public sector outsourcing in the future. But it’s really not right to take a serious issue like this, point to a few failed companies and say ‘told you so’.

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