Our stakeholder engagement and consultation has provided a bank of case studies from which key points of learning can be drawn. This learning has been distilled below.
Pressures from costs and overheads to insourcing
Some stakeholders, particular in Welsh quasi-public sector institutions where outsourcing is more common, offered a more pessimistic view on the ability to insource. Here there was a feeling that that the costs aren’t always fully understood and that there is a sense that some people do not understand the “real costs of doing things in-house and therefore tend to prefer in-house options”. More specifically, there was a concern about pressure of new overheads in general administration, managing supply chains and navigating complex regulatory regimes and auditing requirements. Catering stands out as a particular service area where this challenge is most apparent, where outsourcing is practiced as a means to ensuring expertise to alleviate the aforementioned pressures of overheads. However, this challenge is not insurmountable, pressures of overheads and costs of expertise can be shared across several institutions or across public bodies and local authorities.
Benefits and opportunities for innovation unlocked by insourcing
The primary policy driver for public sector insourcing, from the Welsh Government’s perspective, is the pursuit of a socially just, fair work agenda for Wales. Indeed, the ability for public bodies and institutions to instil socially just, fair work practices is a key benefit of insourcing as it works to actively de-financialise public service delivery and tackle the wealth extraction it entails. For more on the role of financialisation, privatisation and outsourcing in wealth extraction from public services, see chapter ‘Wrecking the Foundational’ in: Foundational Economy Collective (2018). Foundational Economy: The Infrastructure of Everyday Life. Manchester University Press.
Much of our engagement with contracting authorities who have engaged with insourcing has shone a light on opportunities for innovation in service delivery as a direct consequence of insourcing whereby the boundaries around service specification, essential for outsourced contracting, are dissolved. Examples here include:
- innovation in leisure services, where insourcing has enabled the development of an active-lifestyle approach to social care provision and better integration with health services to ensure the development of a healthier and more active local populace – easing pressure on resources in health services in the longer term
- Insourcing of housing repairs and maintenance enabling a skills expansion and local recruitment programme by ensuring that TUPE’d staff are supported to learn new trades and creating opportunities for local residents and traditionally underrepresented groups within the industry o access new traineeships.
Insourcing also presents an opportunity to establish greater control over supply chains of periphery contracts to aid local economic development in favour of people, planet and place. For example, after insourcing on-board catering services, Transport for Wales have aimed to utilise their demand for food supply to support generative Welsh firms in line with Welsh Government ambitions to support the foundational economy in Wales.