Outsourcing could boost private sector, says PwC

Posted on 13 Oct 2010 by The Manufacturer

A new report from PricewaterhouseCoopers (PwC) has said that although almost half a million private sector jobs could be lost because of spending cuts, increased activity in areas such as outsourcing could mean that there is potential for private sector job creation.

Martyn Hart, Chairman of the National Outsourcing Association said:

“There are a number of reasons why outsourcing has been primed as one of the sectors to benefit from the public sector cuts, and although it’s true that we could see new jobs created in the private sector, it’s important to recognise that not all of them are linked to cost. For example, it’s worth remembering that by outsourcing services, the public sector will be able to call on much greater resources. Organisations in the private sector are structured to be able to deliver some of the larger supply chain requests necessary when dealing with a large, national contract, and can turn them around quickly and easily.

“Of course, as with any deal, if outsourcing is truly to thrive in the public sector, then it will be necessary for the relevant decision makers to ensure that that due diligence has been undertaken. If the public sector rushes into outsourcing, looking for a quick fix, without first ensuring that their service providers are a good cultural fit, or that they can deliver an improved service, then it’s inevitable that problems will arise, which means that any jobs that have been created could be lost as a result.
“Perhaps the biggest danger is that public sector departments could look to outsource cheaply, at the cost of improved service. After all, it’s clear that any project initiated on cost alone, is more likely to end in failure. If performed correctly, however, and for the right reasons, it’s clear that outsourcing can achieve real results for the public sector, and provide lasting employment for private sector workers – not just as a short-term solution.”