Fact Service June 2011

Issue 25

U-turn on privatisation of local services

More than half of all councils have backtracked on outsourcing contracts by bringing services back in-house, or are considering it, after failings by private companies, a survey by the public services union UNISON reveals.

The union’s evidence proves that privatisation is a risky experiment, as these councils revealed money was drained, standards were driven down and they had a lack of control over the services.

Three out of five (60%) council officers surveyed said the need to improve efficiency and reduce service costs had led them to consider bringing services back in-house.

When the scale of savings was compared to the scale of the service back in-house, almost 13% of respondents said insourcing could lead to savings of up to £25,000 a year. A further 8% reported savings of up to £250,000, 6% said £500,000 and 5% said £1 million could be saved a year.

Other advantages of insourcing included flexibility (64%), greater local responsibility (52%), improved staff morale (33%) and better terms and conditions (25%).

UNISON general secretary Dave Prentis said the survey “exposes the real danger of outsourcing services to private companies”.

Councils currently seeking it out as an easy option must realise that “it will cost them more in the long run”.

“These private contractors have failed on their promises and the councils have been left with huge costs and lower standards of services,” Prentis said.