Union chief calls for outsourced services to be brought in-house

The general secretary of public sector trade union Unison has called on government to bring as many outsourced contracts as possible back in-house.

Unison’s Christina McAnea called for the insourcing of services following the publication of a report in which the union said a future Labour government should bring all public sector contracts in-house, unless there is a genuine public benefit.

It said outsourcing to private suppliers should only be allowed when certain tests are passed. These include tests on value for money, quality of service, effects on existing workers, the impact on the local economy, and the ability of contractors to meet climate and equality targets.

The union, which has 1.3 million members, said local services are always best provided by publicly accountable organisations that are based in the local communities they serve. “But central government has put the squeeze on health, care and school budgets, causing local councils and hospitals to put key contracts out to tender to reduce costs,” said McAnea.

“This isn’t good for anyone,” she added. “Essential public services should be run for the public, not to make a profit for shareholders.”

Public sector IT outsourcing, including contacts covering local and central government, health, and education, was worth £12.6bn in 2021, according to a report by Tussell.

But outsourcing public sector services is often a controversial decision, with workers’ rights impacted and concerns over the quality of services when suppliers look to offer cost savings.

While the squeeze on public sector budgets continues, there is no groundswell of organisations insourcing, but the public sector could have a useful case study of how to bring services back in-house through the London Borough of Barnet’s decision to do so with swathes of outsourced services, including IT.

Last year, Barnet councillors voted to end the London borough’s outsourcing contract with Capita by 2026, and will bring work, including IT, back in-house.

Members of the council’s policy and resources committee meeting voted in favour of ending the contract. The 10-year deal, signed in 2013, included HR, finance, IT and estates, as well as customer services and revenues and benefits.

Originally known as the One Barnet programme and seen as a flagship for councils in the future, there have been concerns over the quality of delivery of the contract, as voiced in a 2018 report recommending that HR and finance services, then provided by Capita, should be brought back in-house.

Most privatised services are set to move in-house next year, but IT, customer services, and revenue and benefits contracts will be extended until 2026 because it would be complicated and costly to move them immediately.