Parliamentary group of MPs to discuss outsourcing and shared services

A parliamentary group of MPs that will look at how the public sector can get more out of outsourcing and shared services will begin work when it has its first meeting this month.

A parliamentary group of MPs that will look at how the public sector can get more out of outsourcing and shared services will begin work when it has its first meeting later this month.

The All Party Outsourcing and Shared Services group, which was first talked about in May, will meet on 23 August. Conservative MP Bob Blackman will chair the group.

"The group believes that a deeper look into the potential of outsourcing and shared services to help deliver savings across the public sector would be welcomed by the Coalition," said a statement from the National Outsourcing Association (NOA) promoting the event.

Although the UK public sector is the biggest user of IT outsourcing services it is perhaps better known for its failures rather than successes.

"By looking at projects that have worked on time and delivered savings, the group hopes to draw out common themes that can form a best practice guide for procurement officials and government. The group will also look into projects that have not worked, and decide what lessons can be drawn from these," said the NOA.

Buyers, suppliers and officials will give evidence.

The group wants evidence and case studies from outsourcing and shared services suppliers. Evidence should be e-mailed to admin@noa.co.uk with "Evidence" in the subject line, before 10am on Monday 22 August.

Martyn Hart, chairman of The NOA, welcomed the establishment of the group: "This is a wonderful opportunity for our members to contribute meaningfully to the debate. It gives them chance to showcase their best practice examples and success stories, helping the public sector investigate how to outsource smarter."

In May last year Seymour Pierce analyst Caroline de La Soujeole said government cuts might hurt outsourced service providers in the short term but that in the long term it will mean more public services being outsourced.

She said at the time that a "golden age of outsourcing awaits" as the government turns to the private sector to get more efficiency for taxpayers' cash.

She said 14% by value - some £80bn - of public sector services are outsourced but she thinks that could exceed £140bn by 2015.

Robert Morgan, director at sourcing broker Burnt-Oak Partners, says that a closer look at outsourcing might actually lead to more services being done in-house. He says this is because Whitehall departments are increasingly competing for work at other departments. "I can see more services being shared by departments and existing suppliers being terminated," he said.

Morgan said the Department of Work and Pensions has recently taken over some HR and payroll functions at the Ministry of Defence, for example. "Shared services is something the government has been looking at for about six years and it is finally doing something," he said.

In 2009, the government led by Gordon Brown discussed creating service providers to support government departments with IT and other services.

According to reports at the time former civil servant Gerry Grimstone was asked by the Treasury to find ways to raise money for the government.

The plan could have seen seen the creation of massive public sector companies that would eventually be floated on the stock market. They would compete with big private sector service providers such as Capita.

Grimstone told the Financial Times at the time there are lots of things in the public sector that are akin to business activity. "We are just embarking on what could turn out to be a radical piece of work on identifying business activities within government and corporatising them," he said.

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