A Freedom of Information Act request by PeoplePerHour recently exposed an example of public sector waste. In 2008/9 UK local councils spent an astonishing £19.1 million on third-party website agencies, up by 18.6% from 2007/8. We calculated that for government IT/Web services alone, a significant amount of £6.7 million of taxpayer’s money could be saved through outsourcing.
On Friday, a leading business process outsourcing (BPO) firm, namely Capita, announced a prediction regarding an increase in public sector outsourcing, as the newly-elected government sets forth to impress by delivering services more cost-effectively than ever before.
The chief executive of Capita, Paul Pindar, has said that a rise in public sector outsourcing could ‘make a material contribution to savings’ as intended by the new coalition government’s austerity plans to cut down on government costs.
Having won a staggering £523 million worth of new business and rebids in the past six months, Capita said it was witnessing a strong pipeline of work coming through for local councils, central government, health and defense departments, as public sector clients are forced to offload work to the private sector. The new coalition government has set targets to cut 25 percent from some public sector departments and has asked the civil service to identify savings of up to 40 percent.
The recent announcement is a positive indication that the public sector is at last beginning to follow the example of the more efficiently-run private sector, cutting unnecessary costs and embracing technological innovations like flexible hiring and outsourcing.
If it is to reduce spending, then it is a good initiative. There country on that the spending on the public sector is horrifying.