Craig Dearden-Phillips: Giving services back to councils will be a disaster

Labour's new outsourcing policy is a reheated version of the unaffordable municipal socialism that got us into this mess in the first place

Craig Dearden-Phillips
Craig Dearden-Phillips

Democratising Public Services – A Plan for Twenty-First Century Insourcing is Corbyn-Labour’s attempt to explain how public services will work in the event of a Labour victory in the inevitable general election. 

It starts well enough with a strong critique of the soulless outsourcing business – the likes of Carillion, which we have all come to associate with failure. 

But then it moves on to the solutions. These are essentially a reheated version of the kind of unaffordable municipal socialism that led us into the arms of the devilish outsourcers in the first place.

There is to be a presumption that the council will be the default provider of services.  

The justification for this is, essentially, that the council doesn’t have to contract with anyone and this saves money. And if the councils run many more services than they currently offer, this will produce tons of efficiencies. 

Should the third sector be worried? Here I differ from John Tizard, who seems assured that, despite the headlines about insourcing, Labour is targeting only the most egregious offenders and actually wants a really brilliant, co-productive relationship with local third sector organisations as deliverers of services.

Why do I take a different view? Three reasons. The first is that my experience of dealing with Corybn-Labour councillors is that the subtleties of this paper are probably lost on them. "In-house" is all they want, all they know and, weirdly, what they live for.

You can throw all the evidence in the world at them and they still want to insource it. You won’t see this paper if Labour gets in, you will see a Labour council wanting to bring your staff and contracts in-house. 

My second reason for taking a different view relates to cost. While outsourced services are definitely cheaper, the cost of providing the same thing in-house is massively higher. Defined-benefit sector pensions alone can add up to 25 per cent to the overall cost. This means we end up with fewer services at a much higher cost.  

The third reason I am worried about Labour’s plans is quality. There is, in this document, the assumption that insourced services will be better. Anyone who receives a service from a council will notice that it tends not to conform to modern ideas of quality. It is seldom delivered digitally. You are rarely treated as a paying customer. And it is rare to be delighted by the flexible and non-bureaucratic manner in which the service operates.   

No, giving services back to councils will be a disaster. The same expensive disaster they were before. While nobody can defend the large private outsourcers, please don’t be suckered into supporting this rehash of 1980s town hall socialism. It crashed then and it will crash again, taking you with it. Don’t believe a word they tell you.

Craig Dearden-Phillips is an independent adviser to chief executives and boards, leads Social Club, a network of social purpose leaders, and was a Liberal Democrat county councillor in Suffolk

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