Seán Sherlock (Cork East, Labour)
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125. To ask the Minister for Public Expenditure and Reform his plans for outsourcing in the public service; and if the cost of labour will continue to be excluded from the business case for outsourcing of public services. [26403/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Government is committed to using alternative models of service delivery, including outsourcing, as part of our ongoing drive to provide the most efficient and effective services to the public.

External Service Delivery formed a key component of previous Public Service Reform Plans published in 2011 and 2014 respectively.  To meet the obligations set out in these plans, Departments and Offices were requested to produce specific proposals outlining their ambitions in respect of outsourcing, in addition to detailing the services that they already deliver using external providers. These documents were published in 2015 and are available on my Department's website.

Officials at my Department are currently in the process of preparing a successor to the Public Service Reform Plan which is intended to cover the period up to 2020. I expect that alternative models of service delivery, including the option to outsource services in appropriate circumstances, will feature as a mechanism that is available to public service managers to allow them to innovate and deliver the most cost-effective services to the citizen.

Nevertheless, I wish to stress that decisions to outsource functions are reached on a case-by-case basis by the organisation that manages the service in question.  The Department of Public Expenditure and Reform’s role is to support public service bodies in exploring all service delivery options that are available to them and to ensure evidence-informed decisions are made when selecting a delivery model. In order to meet that objective, my Department have undertaken a substantial programme of learning and development over a number of recent years to up-skill public service managers on best practice around outsourcing using evidence-based techniques.

In line with existing expenditure policy, public bodies are generally required to look at a number of different factors when exploring the potential to outsource a function. These factors include issues such as costs, quality, service effectiveness and the public interest. This continues to be the case in respect of any new service that is being mooted for delivery by public bodies.

As the Deputy may be aware, in concluding the Lansdowne Road Agreement in the summer of 2015, a limitation was placed on the ability of public bodies to outsource existing services. In particular, a restriction was introduced which prevented direct comparisons being made between total labour costs for direct provision of a service against the total labour costs of a potential outsourced provider in the preparation of the business case.

As I have stated, this restriction only applies in respect of existing services; that is services that are currently being provided directly by the State or its agents.  It does not apply in respect of newly conceived or planned services.

In respect of the second aspect of the Deputy's question, these matters are currently under deliberation by the management and staff association parties in the context of the ongoing pay talks.  Accordingly, it would be inappropriate for me to comment any further on that issue at this point.