by Brianna Crandall — August 6, 2012—Local authorities in the U.K. plan to outsource 32% of all services by 2014-15, according to the latest research by YouGov, for support services and construction company Interserve. Local Services—in Need of Transformational Change indicates that outsourcing currently accounts for a quarter (26%) of all council services and has grown by six percentage points, from 20%, in the last twelve months, as councils seek to save money by making their operations run more efficiently.
Authorities report savings of 16% to date but need to achieve another 18% by 2014-15. However, with 31% of councils not expecting to achieve their target cuts in this timeframe, splits are emerging as to the best way forward. Those councils who need to make greater than average savings (over 25% efficiency savings) or have larger budgets (over £100 million) plan to outsource up to 60% of all services. Yet other councils aim to keep resources in house or share with other public sector providers, planning to outsource just a fifth of services by 2014-15.
Adrian Ringrose, chief executive at Interserve said, “Forward-thinking councils are aware that they need a transformational change given the severe pressure on budgets for the foreseeable future. And 38% of councils consider there to be no service area, including Children’s Services and Public Protection, unsuitable for outsourcing.”
The report also found that:
- 44% of councils state local political concerns are a serious barrier to outsourcing.
- 44% of councils still haven’t implemented a strategy to deal with their budgetary challenges to 2014-15, down from 79%this time last year.
- 81% said outsourcing to a commercial partner had been successful, and 82% believe that outsourcing has a role to play in achieving their targets.
- Councils expect only 20% of outsourced council services to be provided by the third sector by 2015; and half to be provided by commercial providers by 2015.
- 16% fewer councils believe that the voice of the community will affect future measurements compared with 2011’s results.
- 57% believe that Community Budgets will have no effect (41%) or even reduce (16%) councils’ ability to meet their targets.
- Councils expect a 15% reduction in the size of their built estate.
- 44% of councils still haven’t implemented a strategy to deal with their budgetary challenges to 2014-15, down from 79%this time last year.
This third annual survey by YouGov confirms that local authorities have exhausted the “quick win” savings and cut marginal services but are still faced with reductions that range from the “unpalatable to unacceptable,” according to one respondent.
