Gershon drives Tory efficiency plans

So the Tories have snapped up Sir Peter Gershon - exciting times! Sir Gershon, not one to beat about the bush, has already started doing what most have been too afraid to do – actually looking at where public sector savings will be made.

This could be a dangerous move for the Tories just weeks before the election, especially as the headline most media outlets have gone with concerns the 40,000 jobs that could be “at risk” in Tory hands. But pragmatism is vital if we’re going to get out of this ever-deepening debt hole, so talking turkey is an important move and may win-over business brains. Gershon’s comments also bring outsourcing and shared services back to the fore, which is a debate that needs to take place.

Why should we be talking about outsourcing? On a macro-level, the continued increase in job taxes has heaped pressure on UK companies and public sector organisations alike. Cutting costs has become a major priority, and outsourcing is an efficient and effective way of doing this. In order to survive and compete in global market, it is clear outsourcing must now move up the agenda.

We will have to wait and see whether the Tories get in before we can see the extent of efficiencies that can be driven from the sector and whether their £12bn target is realistic. However, potential savings through outsourcing do range from 12.5 and 20 per cent depending on what is being outsourced, so there is much potential.

If government departments do consider outsourcing, they can potentially benefit at both ends of the spectrum. Firstly outsourcing will not only reduce costs but could provide progressive career paths and experienced workers if adopted correctly. Previously outsourced work has been done sparingly and, often without consideration of whether these were core tasks or not, so there has been no clear career path for workers, leading to inconsistencies and limited experience. Outsourcing best practice must be followed for this to work.

By commissioning work rather than trying to do it all itself, the public sector would see an increase in focus and quality of work outsourced, no initial rise in UK unemployment and an increase in the amount of cost savings made. One true benefit of outsourcing is its transparency; every stage can be evaluated and improved upon if necessary and informed decisions can be made and the public can see what’s going on.

It is difficult to predict whether the apparent 44,000 public sector job losses will be actual jobs going or they are simply vacancies yet to be filled and retirements. We understand that currently we have the largest public sector the UK has ever seen, which will in itself have an effect on the number of real job losses. Other countries manage to survive with many less public sector workers – so we should be able to. Outsourcing and shared services can help to reduce the public sector burden without significant job losses, perhaps this represents a happy medium?


Copyright © 2010 IDG Communications, Inc.

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