Spending Review triggers ‘quantum change’ in public sector outsourcing landscape, says EY
Government spending cuts will 'almost certainly force public sector to outsource' its services, a process which will need to be 'carefully managed', warns EY.
Chris Brown, EY’s UK head of business assurance comments on the Government’s Spending Review:
“With £20bn of departmental spending cuts, the impact of the Government’s Spending Review will almost certainly force the public sector to outsource more of its services. The announcement also coincides with the Government’s decision to retender around £17bn of existing contracts. As the new model is designed to break each contract into smaller components, of less than £100m, this will obviously dramatically increase the number and complexity of contracts to be awarded. Many contracts are likely to be to smaller companies, including potentially some new market entrants.
“Clearly this will all need to be carefully managed in order to provide value for money for the tax payer and to avoid some of the mistakes we have seen in the past.
“These marriages between the public and private sector have to work; and it will take a whole lot more than good intentions and wishful thinking. With the potential for some contracts to span anything from 12 months to 10 years, Government and business will need to keep their relationships under regular review, to ensure they are appropriately resourced and that the lines of communication remain open.”
