17 February 2009
Policitians, policy makers, business leaders and the media lack understanding of the economic and social contribution made by the outsourced business services sector in both the public and private sectors. Jane Fenwick speaks to Mark Fox whose aim it is to change this perception
THE BUSINESS SERVICES SECTOR IS LIKE AN ICEBERG. The bit you see above the waterline is only a fraction of the whole which extends a long way under the surface. As a relatively young industry it is little understood and largely underestimated by business, media and politicians.
Enter Mark Fox 14 months ago at the Business Services Association determined to raise the sights of the industry. Arriving from five years as Director of Communications & Public Affairs of the BVCA (the British Private Equity and Venture Capital Association), Fox has also been journalist with the Mail on Sunday and the Sunday Express, and has an active interest in national politics – a combination of skills uniquely capable of opening doors in business, media and politics.
Among the doors opened so far – twice to date – have been those at 10 Downing Street, where Fox and senior executives of BSA members met politicians and policy makers in ‘round table’ discussions on topics of key interest such as PFI, pensions, taxation and appropriate levels of regulation.
“Politicians want to meet practitioners as much as practitioners want to meet politicians,” Fox explained. “My key role here is to facilitate these meetings and also to co-ordinate them to make sure that the right message, substance and policy issues are being discussed.”
Fox is the first to recognize that there is a big job of work to do not only to get the importance of outsourced business services across to a wider audience but also to dispel the perception that outsourcing is inevitably a ‘bad thing’. As Fox explained, “The BSA is setting about tackling it in a methodical way, bringing coherence and energy to the task of getting this very important industry represented in an appropriate way.”
He continued: “I aim to convey a coherent message in the media that this is of a highly skilled, highly professional and highly innovative industry that is a huge UK success story. It is a major player in creating investment and dynamism in the economy and not, as has been the case to date, just the ‘whipping boys’ of political debate.”
The most tangible achievement thus far since taking up the role of chief executive of the BSA has been the publication at the end of last of the BSA’s report, Outsourced and Business Services – A UK Success Story, which for the first time traced the development, scope and significance of the sector.
With statements such as “The contribution of the outsourced and business services sector to the UK economy is greater than all other industry sectors in terms of output and the number of people employed…” and “Business services make arguably the largest contribution to the economy of any sector contributing nearly 10% of total UK Gross Value Added and employing 1 in 7 employees”… the report puts forward an solidly argued case backed by firm statistics from a serious and large business sector that needs to be given the credit it is due.
This report highlights some big numbers which can’t be ignored. “Business services contributed £18bn in surplus to the UK’s trade balance in 2005”.... and “The Support Services sector was estimated to be worth more than £303bn in 2007 with growth of 8% from 2004-2006.”
Commenting on the report, Fox said, “It is extraordinary that before the report there were basic facts that no-one could answer, like…What is the industry? How many people does it employ? How much taxation does it contribute? This report is a start. It has also helped the industry to have a better understanding of its own size and scope. We have held up a mirror up to the industry to say ‘this is what you are as a whole’. Now when we speak to government and the media we have some substance. The report has moved the debate forward.”
In Fox’s view, facilities management is just part of the business services sector, albeit a significant part. He believes it gains strength from that association with organisations that represent a broader interest. The BSA membership is growing with 16 full members and 15 associate members from related sectors including finance and legal. The 16 full members carry some considerable weight with a combined worldwide turnover of £67bn and employing about 1.5m people; in the UK they turnover is £14bn and employ 340,000 people.
But size isn’t everything and Fox warns against complacency. “There is a consensus in the Labour and Conservative that on the whole outsourcing from the public sector is the way to go, but in neither party does this run deep. We have ensure that the commitment to outsourcing remains through the difficult times as well as the good times. We have to continually provide evidence to show that outsourced business services providers invest more, we are professional, we provide people with better jobs and we are raising standards in all that we do. It will not go perfectly on every contract – it is a human operation – but more often that not we do a better job than anyone else.”
His strategy to persistently gain access to the right people, produce material, have meetings, get politicians to see examples of good practice in all areas, is particularly important now in uncertain economic times and in the months leading up to the next general election.
He is particularly concerned that the validation of the role of private sector companies delivering outsourced services to the public sector given by DeAnne Julius in her review published last summer, which together with a host of valuable recommendations, should not be ‘placed on the shelf’. A ministerial reshuffle and a change of policy priorities with the arrival of Lord Mandelsson as Trade Secretary could, Fox fears, mean that many good things that were in the DeAnne Julius report get lost. He explained, “Public sector managers need to procure more smartly and manage more effectively. They must learn to manage their private sector suppliers more professionally.”
The All Party Parliamentary Group for Business Services plays an important role in raising the profile of the sector and discussing key issues with politicians. Formed after the 1997 election, the All Party Parliamentary Group covers the members of both Houses of Parliament and all political parties, and its members are united by a common interest in the business services sector and the people who work in it. The Group has undertaken official enquiries across a range of issues and in this session of Parliament, it will focus on hospital acquired infection, sustainable food procurement and the London Olympics.
At the end of last year it hosted the EU Commissioner for Trade, Charlie McCreedy to a breakfast meeting of 40 BSA members. Fox stresses the importance of such meetings for raising the profile of the industry at home and in Europe.
“We develop a set of policies and views and meet with everyone who will listen in open way, working even handedly with Labour, Conservatives and Liberals.” Fox explained. “In Scotland, where there is a visceral antipathy towards the outsourcing industry by the Scottish Government with NHS cleaning contracts, in particular, we say you are ‘wrong’ and this is a ‘bad policy for the Scottish patient and for Scottish taxpayer’. We do not see why the people of Scotland should be disadvantaged in the way the people of England are not.”
Fox is confident for the business services sector in these uncertain economic times. “Economic cycles come and go, “he said. “It is not the first time we have had tough times. The business services industry is extremely well placed to meet the challenges that this presents because there is an entrepreneurial verve around the quality and standard of service that BSA members deliver.” He continued: “The role of outsourcing will grow in the private and public sector. What politicians and trade unions need to get their heads around - and we need to help them do this - is to take advantage of the skills, opportunities and standards the private sector offers and manage us better from their point of view. A growing role for the industry in the delivery of business and outsourced services is inevitable because of the quality and standard and innovation it offers.”
Fox has signed up the BBC’s Business Editor, Robert Peston as keynote speaker at the Annual BSA dinner later this year, and has James Purnell MP, Secretary of State for Work and Pensions is giving the second annual BSA Lecture this month. But top of his agenda is delivering the BSA’s prebudget submission to the Chancellor of the Exchequer.
The BSA’s finance and taxation committee comprising seven finance directors of BSA member and associate member companies provides an enviable pool of talent. “The BSA’s Finance and Taxation Committee will build on its pre-budget document prepared and submitted in 2008, and reflect on what was in the Chancellor’s pre-budget report last autumn and on what the economy is doing now. The report becomes policy of the BSA on behalf of the UK industry. “
Fox admits that representing the business services industry is not complicated but requires, he says, “A certain level of persistence and energy and openness and transparency, and integrity.” His aim one year from now is that the he has “Embedded the sense that we have got a successful and significant industry that has an enormous role to play in helping the economy through this difficult period.”