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Government revamps outsourcing measures

The Cabinet Office has launched new outsourcing guidance which has been designed to improve how government works with industry and deliver better public services.

The Outsourcing Playbook will ensure that the government gets right more projects from the start, engages with a diverse and healthy marketplace of companies, including small businesses and charities, and is ready for the rare occasions when things go wrong.

This follows reforms announced in recent months by the Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, David Lidington, to ensure that government procurement is fit for the future, including putting social values at the heart of public service delivery.

New measures include changes to how government allocates risk between itself and its suppliers, to ensure contracts are set-up for success and the public are provided with the best possible service.

The government is also taking steps to improve the design of outsourcing projects from their inception. New complex contracts will be piloted with the private sector before rolling out fully, enabling the government to learn from experience and deliver better public services.

Cabinet Office Minister, Oliver Dowden, said: “Outsourcing can deliver significant benefits, including value for money and more innovative public services. Our new measures will improve how the government works with industry and provide better public services for people across the country.

“I can provide reassurance that the Playbook makes explicit that, when designing contracts, departments must seek to mitigate, reduce and then allocate risks to the party best able to manage it.

“A more considered approach to risk allocation will make us a smarter, more attractive client to do business with.”

Measures in the Playbook include:

  • Requirement for Pilots – enabling the government to learn from experience and deliver better public services
  • Risk Allocation – to ensure contracts are set up for success from the outset
  • Key Performance Indicators – KPIs from every new outsourcing contract will be made publicly available
  • Resolution Plans (Living Wills) – For the rare event of the supplier’s corporate failure
  • Publication of Pipelines – Departments will be required to regularly publish their upcoming requirements, to help suppliers plan ahead
  • Make versus Buy Decisions – To identify when it is best to deliver public services in house or when there is benefit to drawing on the expertise of the private sector

Welcoming the launch of the outsourcing playbook, Phil Bentley, CEO, Mitie, said: “Outsourcers, such as Mitie, play a key role in the provision of public services. We have been calling for a partnership approach with more transparency, innovation and sustainability to ensure best value for Britain’s tax payers. This Outsourcing Playbook is a major turning point for our industry moving from a ‘race to the bottom’ based on the lowest price, towards best value, and great services, delivered at a fair price.” 

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