UK Public Sector outsourcing trends: more contracts for the same volume of work

This article in Outsourcing Magazine caught the Blog’s attention. The market for outsourced public sector services in the UK dominates Europe and, globally, is second only to that of the US.

Outsourcing as a procurement strategy can be, of course, a thoroughly respectable response to the circumstances in which any entity finds itself at any point in the economic cycle. Given the institutionalised austerity which is guiding UK government policy it is perhaps no surprise to discover that we are leading the way.

Delving into the detail, though, reveals some telling information. Whilst for each of the past couple of years the number of outsourcing contracts has doubled, the overall volume of that activity has remained relatively stable.

The market is being presented with a greater number of smaller contracts. Looking at this positively it could be that central policy for SME engagement is beginning to gain traction. On the other hand, however, it may be that as the market matures it is discovering that there is a scale at which outsourcing becomes ineffective or at least inefficient.

Both are very interesting possibilities from a procurement perspective – any thoughts?

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