Written answers

Tuesday, 3 July 2018

Department of Public Expenditure and Reform

External Service Delivery

Photo of Mick BarryMick Barry (Cork North Central, Solidarity)
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32. To ask the Minister for Public Expenditure and Reform if a cost-benefit analysis will be conducted into the outsourcing of public service work to private agencies across Departments and State bodies versus the creation of directly employed public service posts; and if he will make a statement on the matter. [29102/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The Government is committed to using alternative models of service delivery, which may include external service delivery (outsourcing), where appropriate, as part of our ongoing drive to provide the most efficient and effective services to the citizen. This commitment was recently renewed in the Government's innovation and development framework, Our Public Service 2020.

Decisions to outsource functions are reached on a case-by-case basis by the organisation or public service body that manages the service or function 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, the Department has 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.

The Department of Public Expenditure and Reform does not intend to undertake a whole-scale review of outsourcing of all public service work. It should be noted that, in line with existing expenditure policy, public bodies are generally required to examine a number of different factors when exploring the potential to outsource a function. These 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 considered for delivery by public bodies.

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. This limitation remained in place following the extension to the Lansdowne Road agreement concluded in 2017.

The 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.

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