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Proving the case for public sector services outsourcing

11 November 2009

BSA report highlights the success of the outsourced business services sector and its potential role in reforming public services by increasing productivity and quality of services.

Proven Providers, the latest report from the BSA provides a hard hitting and well argued case for experienced and successful outsourced business services providers to engage with Government on the reform of public services.
“No matter which party is in power after the next general election, government will urgently need to cut the costs of delivering public services while not compromising quality,” says Kevin Craven, the new chairman of the BSA and MD of Balfour Beatty Workplace, in the publication’s introduction.
He continues: “Case studies in this report show how we deliver savings, often of the order of 30 percent while improving service quality. About a fifth of public spending is already outsource but there is scope to do much more.”
According to Proven Providers, the UK government has now become the world’s leading public service outsourcer.  In 2007/8 it spent £79bn on services from suppliers.  This is about a between a quarter and a third of all spending on public services and 5.7 percent of GDP.  About 1.2m people are employed in the outsourced public sector services sector. Commenting on the launch of the report, Mark Fox said, “Government needs the UK outsourcing industry. The economic imperative to introduce more competition and bring in more private sector expertise in the public sector is obvious. About a fifth of public spending is already outsourced, but there is scope to do much more. BSA members are not calling for privatisation. They are outsourced service providers whose success relies on good relationships with the client and satisfied users of our services."
Proven Providers also shows that across the public sector total productivity fell by just over 3.4 percent in the 10 years to 2007, as an average of 0.3 percent per year. Over the same period in the market sector, productivity rose by 27.9 percent.  If productivity in the public sector had matched that in the market sector, it would have been 32.4 percent higher and we would have 11 percent more public services for the same money.
Hard copies of the report can be obtained from Melanie Greenall, BSA Head of Policy & Research, at melanie.greenall@bsa-org.com


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