Suffolk insources finance and human resources

Suffolk County Council has decided to insource its finance and human resources functions, concluding that the move would be cheaper than continuing its outsourcing arrangements with BT.
The council, along with Mid Suffolk District Council signed a contract with the telecoms provider in 2004 to run the services through a joint venture company, Customer Service Direct (CSD), with the agreement set to run out next year.
An assessment of options produced for councillors concluded that bringing the services back in house would have a lower upfront cost and a shorter payback period than continuing to outsource the services.
The document said: “The analysis indicates that whilst returning to the market may represent the most significant savings in the long term, this would require considerable investment to achieve and therefore has a longer payback period.”
Around 750 staff, who were seconded from the council to the outsourced function will now come back in-house to run the services.
The decision to insource represents a shift in strategic thinking at the council, according to Aiden Dunn, assistant director of strategic finances at the council.
Speaking to Room 151, Dunn, said: “At the time we originally outsourced these services, it was almost an ideological approach, but we have matured into having a more pragmatic approach.”
The council, he said, would still outsource frontline services, such as libraries, where it made sense to do so.
“It may look like a contradiction, but we measure and evaluate each option on its merits.”
Dunn added that the decision to insource was not purely financial, saying that the council also wants to benefit from the flexibility that it will bring.
He said: “We are looking at joining up back office costs with blue light services, and are collaborating with Norfolk County Council in some areas so things are going to change.”
According to Dunn, an even cheaper option would have been to provide a shared service for all local authorities in Suffolk. But he said that the model was not supported by boroughs and districts.
He said: “They could not be persuaded. Some of that was down to politics, with some authorities not attracted to the idea of being in bed with a commercial partner.”
Discussions with a pay-as-you go provider came to nothing because it would have worked out more expensive if staffing levels at the council had fallen below 5000, he said.
The council has also decided to create a ‘New Schools Service Provider’ to deliver the key services SCC sells to schools, some of which were provided through CSD.