Monday 16 September 2019 / 9:05 AM Economy / John McDonnell

‘String of high-profile failures’ in outsourcing – McDonnell responds to Institute for Government report

John McDonnell MP, Labour’s Shadow Chancellor, commenting on an Institute for Government report analysing ‘a string of high-profile failures’ in outsourcing, said:


“We’re at a crossroads on outsourcing, as the Institute for Government says, and it’s staggering to look back at the last 40 years of this failed experiment and see so little strong evidence that it works.


“The ‘string of high-profile failures’ discussed in this report are not just one-offs – they reflect a broken model for delivering public services, which prioritises profit over people.


“Labour will end this racket and make sure our public services are run in the interests of the many, not to enrich a privileged few.”




Notes to Editors


  • The Institute for Government report will be downloadable here after 11.00pm on Sunday 15 September: Copies of the report can be requested under embargo from [email protected].
  • The report notes that “a string of high-profile failures has put Britain’s outsourcing model under intense scrutiny” (p. 4). It says that, despite claims that outsourcing achieves 20%-30% in cost savings, “we found little evidence that such savings are available today, whether for services outsourced for the first time or on second- or third-generation contracts” (p. 6). It adds that “too narrow a focus on price over quality in selecting bids has contributed to failures” (p. 48). On the lack of a good evidence base it concludes that: “In a range of key service areas – including prisons, health care and IT – government lacks good recent studies on the comparative cost and quality of public and private provision” (p. 67).
  • Labour’s policy for local insourcing released in June, Democratising Local Public Services: A Plan for Twenty-First Century Insourcing, is available here:
  • The Institute for Government says “Government should get better at deciding when to insource” (p. 59). Labour’s plan lays out a framework for deciding when to insource and outsource at pp. 21-26 (with draft legislation at pp. 37-38).
  • The Institute for Government recommends that the Freedom of Information Act should apply to outsourcers (pp. 66-67). This was also announced as part of Labour’s June policy (pp. 26-27).