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The government has published new guidance to provide a route for bringing key services back in-house and get the “absolute best results” for taxpayers.
While the government will continue to work collaboratively with a whole range of suppliers to the public sector, a new Public Interest Test is to be applied before renewing expiring government contracts to prioritise long-term value. This, says the government, will ensure departments and officials look beyond short-term pricing to focus on long-term service quality and public value for contracts over £1 million.
Under the new guidance, central government departments with over £100 million in annual contract spend will create five-year roadmaps to rebuild their in-house capabilities, reversing years of outsourcing that eroded the state’s capacity to deliver its own services.
This follows action on outsourcing taken by Darren Jones, the Chief Secretary to the Prime Minister, in establishing the National School of Government and Public Services, to move away from outsourced government training contracts.
Jones said: “I want to end the era of ‘outsourcing by default’ and build stronger in-house capacity. The British people deserve value for their money – not just the cheapest, short-term option which may not deliver quality in the long-term.
“By introducing this Public Interest Test, and leading the way by looking to bring our cleaners and security staff back in-house when major contracts end in 2028, we are rebuilding our national capacity to deliver high-quality services the British people deserve.”
The government says it is looking closely at how major contracts are managed to set a fresh, reliable direction for the future, and is fully committed to driving up standards, supporting working people, and delivering public services that work for everyone.
When current contracts are coming to an end, officials will thoroughly check if those services should be run directly by the public sector instead of automatically hiring private companies.
Subject to completing a Public Interest Test, the Cabinet Office will look to bring building management services, including cleaning and security staff, back in-house as soon as possible, with this process beginning when current contracts end in 2028.
Applying the test to these services will cover contracts across 83 government buildings and could mean the government opting to take control of frontline workplace services to strengthen its capability and operational security while securing value for money.
Decision welcomed by Unions
PCS (Public and Commercial Services Union) has welcomed the decision to insource facilities management contracts managed by the Government Property Agency, which it states will bring around 2,000 workers, employed in a wide range of essential roles including catering, security officers, cleaners, porters, engineers, plumbers, electricians, receptionists, handypersons and messenger services, back into the Civil Service.
PCS has long campaigned for services to be delivered directly for the public good, generating savings for the taxpayer and improving accountability, rather than allowing private companies to extract profits from publicly funded contracts and says for too long, many outsourced workers have faced a race to the bottom on pay, terms and conditions, despite carrying out essential work alongside directly employed civil servants. It adds that this insourcing decision will improve the working lives of hundreds of members and help address the inequalities that have developed through outsourcing.
PCS General Secretary, Fran Heathcote said: “This is a huge victory for members and a clear vindication of our campaign for insourcing.
“For too long, outsourced workers have faced lower pay, poorer conditions and been treated as second-class citizens. Bringing around 2,000 workers back into the Civil Service will help end that unfairness, deliver better value for taxpayers and show that public services work best when they are delivered in the public interest, not for private profit.
“This achievement demonstrates what can be won through collective action. The Government should now apply the same approach to other outsourced services, including pension administration.”
Commenting on PCS’ press announcement Paul Nowak, TUC (Trades Union Congress) General Secretary said: “This is an important step towards the government’s promise to deliver the biggest wave of insourcing in a generation.“It shows what’s possible when the government listens to and works with unions, identifying contracts which are failing workers and the services they deliver – and securing change.
“For far too long, rampant outsourcing has led to shareholders cashing in at the expense of workers and our public services.
“The scourge of outsourcing can be felt all the way through our public sector – from fragmentation of services to two-tier workforces, where outsourced staff are on worse pay and conditions than their directly employed colleagues.
“The government has promised to right this wrong by bringing outsourced public contracts back in house.
“This will ultimately stop money being wasted and help rebuild our public services, so they are run for public good – not for profit.”
