More councils likely to follow Suffolk in outsourcing services

Councils are likely to outsource more and more social care services to the private and voluntary sectors as massive spending cuts take hold, according to experts.

The prediction was prompted by Suffolk Council’s decision last week to become a “strategic” authority, with nearly all of its services set to be commissioned from external providers.

The council’s leader, Jeremy Pembroke, said the plan was designed to reduce costs, waste and bureaucracy in the face of major cuts in government funding.

Pembroke, whose authority is Conservative-controlled, explained: “This decision was made with consideration to the financial deficit in the public sector and the coalition government’s priority to reduce the deficit and the size of the state.”

A spokesperson said it was too early to say whether the authority’s child protection and care management services would be outsourced, and the fate of the council’s 270 social workers remains undecided.

The announcement comes as councils are being required to make efficiency savings of more than £1bn in 2010-11, with further cuts expected in the comprehensive spending review next month.

Amanda Kelly, head of social care at accountancy firm PricewaterhouseCoopers, said it was likely that more councils would join Suffolk in considering “radical options” in reducing costs.

“[This] inevitably means reductions in staff numbers,” she said.

Kelly said it was important that local government continued to discharge its statutory functions in protecting vulnerable people, and Ed Mitchell, editor of Social Care Law Today, said the legal position around outsourcing these services was unclear.

“Local authorities need to have specific legal powers to enter into arrangements for third parties to exercise functions on their behalf. This means some things cannot be outsourced, for example the setting of eligibility criteria for care services,” he said.

Kelly suggested children’s and adult services should be remodelled to cope with increases in demand through radical policies such as “place based budgeting”, in which responsibility for commissioning local services is pooled under a single body.

“Doing the same thing but perhaps slightly less of it will no longer deliver the scale of savings required,” she explained.

Sonia Sodha, head of the public finance programme at the Demos think tank, predicted more local authorities would follow Suffolk Council’s example or the “easyCouncil” model pioneered by Barnet Council in London, in which residents are charged extra for a higher level of provision, with only a basic service offered for those paying the minimum.

But she added: “Is there enough knowledge in the public sector about procurement and commissioning if more and more councils go down this route?”

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