Post-Election Outsourcing: What to Expect from a Conservative Majority
by Jeremy Coward
General Election 2015 saw the Conservatives secure a surprise majority in the House of Commons, all but guaranteeing Tory rule in the UK for another five years. What do these unexpected political circumstances mean for the country’s outsourcing industry?
Investment Week has already identified that shares in outsourcing companies operating in the UK have risen since the election. Presumably this is largely due to Labour’s lack of success – the party’s election campaign was seen by many as “anti-outsourcing”, with policy chief Jon Cruddas actively coming out and attacking Britain’s biggest service providers.
Now that Labour has failed to achieve power, confidence in the continued success of these big players has been restored. Not to mention the fact that coalition doubled the government’s use of outsourcing during its time in power, investing £88 billion into the industry – this pro-outsourcing trend is expected to continue.
We’re also expecting to see more outsourcing in the NHS, with hope that the use of third-parties will help to bring more efficiency and innovation to the Service.
Last year, Health Secretary Jeremy Hunt assured his critics that his focus was outsourcing and not privatisation: “Using a charity like WhizzKids to supply wheelchairs to disabled children or using Specsavers to speed up the supply of glasses is not privatisation… When the last Labour government used the independent sector to bring down waiting times, that wasn’t privatisation either.”
In their manifesto, the Conservatives also pledged to “raise the target for SMEs’ share of central government procurement to one-third, strengthen the Prompt Payment Code and ensure that all major government suppliers sign up”.
If they come through on this policy, it would be a fantastic, and much-needed, boost for smaller service providers here in the UK. CEO of the National Outsourcing Association Kerry Hallard supported this policy, but warned: “There remains the issue of how many contracts are awarded directly and indirectly.
“Many SMEs work through subcontractors and these cause the bottleneck in payments – so although it all sounds great for smaller businesses, there is currently no guarantee of speedy payment to sub-contracted SMEs working on Government contracts.”
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