Dáil Question on the cost benefit of public service outsourcing

To ask the Minister for Public Expenditure and Reform if there has been a review carried out in the cost benefit to outsourcing public services; his views on same; and if he will make a statement on the matter.

Reply from Minister Brendan Howling T.D.

The Public Service Reform Plan sets out a commitment to evaluate alternative models for the delivery of non-core services in a more cost effective and flexible approach, with a focus on customer service improvement.   In July 2012, the Government agreed a range of actions aimed at achieving a focused and integrated approach to external service delivery of non-core processes with the objective of reducing costs and focusing staff resources on priority areas.    A Commercial Delivery Manager was also appointed to drive this issue.

As part of this approach, the Government has decided that all proposed new services across the Public Service will be tested for external service delivery before any approval to provide the service internally will be granted.   External service delivery leads have been appointed in every Department and Sector and the Health, Justice and Local Government sectors are preparing external service delivery plans.   My Department is also examining a number of potential cross-Departmental projects for external service delivery.  

While my Department is overseeing the development and implementation of external service delivery policy for the Public Service, the testing and ultimate decision with regard to the external delivery of any particular service is a matter for the individual public bodies concerned in each case.   It is envisaged that this will involve cost-benefit analysis, on a case-by-case basis.   To this end, my Department has produced and distributed a Preliminary Business Case Template to all Departments and Sectors. All contracts offered for external service delivery will be subject to the normal rules governing public procurement, which require all services to be offered by competitive tender. In addition, the proposals from the Labour Relations Commission in respect of the Draft Public Service Agreement 2013-2016 reaffirm the principles and procedures in the Croke Park Agreement regarding outsourcing, which include a commitment to evaluate the existing in-house service, the outsourcing option and to compare both.