Outsourcing of services urged

The Cabinet has ordered that Government departments look at the costs and benefits of outsourcing all proposed new services.

The Government is to decide in February which specific public services, if any, should be provided in future by the private sector.

It will consider business cases for outsourcing arising from a review which is being carried out by the Department of Public Expenditure and Reform.

Informed sources said the Department was to develop a shortlist of potential services “where testing for outsourcing or external delivery will be prioritised”.

The Government has also decided the four main areas of the public service – health, education, justice and local authorities – should draw up and implement their own plans for the outsourcing of services.

Further details of the initiative are expected to emerge today.

The Department of Public Expenditure and Reform has appointed a new commercial delivery manager, who previously worked in the New South Wales department of premier and cabinet, to develop and implement a strategy for outsourcing.

Government departments were asked earlier this year by the secretary general of the Department of Public Expenditure and Reform, Robert Watt to “identify and eliminate non-priority programmes and outsource, where appropriate, non-critical functions”.

Mr Watt said there were examples across the public service in which external service delivery “has already provided greater value for money, enabling organisations to move their focus from direct provision to core-value added activities”.

The trade union Impact said earlier this year, after the secretary general’s letter first emerged, that the Croke Park agreement contained specific provisions governing the outsourcing of public services.

It said management was obliged to use direct labour “to the greatest extent possible” and to maintain wages and employment standards in all procurement policy.

The union said that, under the provisions of the Croke Park agreement, there should be no compulsory redundancies as a result of any outsourcing.

It also made the point that there should be consultation with unions on “all aspects of the procurement process at key stages before decisions are made”.

Mr Howlin said today some people are using the Croke Park agreement as a shield for their own inactivity, and that managers in the public service had to manage. The Minister declined to specify who he was referring to in his comments.