Niyamath Parveez

People do not like having to pay their taxes but it is fair to say that there are many benefits that come from it. One of the most important things that people receive from their tax payments is rubbish collection. No one wants to see refuse hanging around their home so are glad to pay for it to be taken away and disposed of properly. This is not in question but for the local council or government looking to provide this refuse collection, there are concerns about the value for money they are getting from carrying out this work.

Local councils and governments are no different from companies these days in that they need to examine each level of expenditure to ensure that value is being obtained. Even though the system may be working well, it is imperative to ensure that the best possible value for money is being obtained in every matter. This can lead to government bodies tendering projects out to outsourcing firms who promise to provide the service at a much lower cost. On one hand, this is of benefit to the local population as it is less of a drain on their tax payments, hopefully freeing up more money for other issues.

However, there needs to be a balance struck between cost and value. If the service is being delivered for a rock bottom price, is a rock bottom quality product going to be delivered as well? If the refuse collection is of a low standard or perhaps late or unable to handle everything that needs to be carried away, would the public be happy with this? They may be paying less for the service that is being provided but if the service is not good enough, many consumers would not be satisfied with the overall service.

This is the exact same conundrum that faces all businesses who are considering outsourcing as a solution to their financial problems. There is an obvious need to reduce the labor costs for any firm in these tricky financial times but for the end user or consumer, the bottom line is usually quality. Value for money is the most important matter for consumers these days and firms or local councils should never forget this.

This situation is the one that is currently facing the Sea Girt Borough Council who are attempting to greatly reduce their cost of refuse disposal. The current cost for the council is in excess of $400,000 but there has been an offer to do the same work for $120,000. As this price is nearly a quarter of the original price, it is evident why it would be so attractive for the council to consider. The council has also had to contend with the fact that the refuse department has been stretched in recent times so this solution may be absolutely perfect for their needs. As always when outsourcing rears its head, many people are concerned about the potential job losses and the impact it may have on the local community but these are issues which will need to be resolved in the future.

Northern Ireland has never had its troubles to seek and during the 1980s, the country experienced huge levels of unemployment, mainly caused by the troubles. The impact of the troubles led to huge unemployment as companies could not continue to trade safely and the nation struggled greatly. The north of Ireland has taken huge steps in recent years to rectify many of the problems and this has been shown in the development of the major cities and the increase in employment opportunities. Belfast is a city transformed and has benefited from an influx on new companies looking to take advantage of the bonuses and benefits offered to them to set up in the city.

Of course, the benefits that were to be had in Belfast were recognized by other countries and cities, which obviously looked to the progress made by the six counties. This has been seen in the advance of the offshore outsourcing around the world and this may be a negative factor in the future of Northern Ireland. This stands apart from the high level of progress made by Northern Ireland with one of the major firms who set up home in the nation was Bombardier. The company makes planes and was a massive employer in the nation and had a great impact on the local economy. The impact that a firm of this size can have on the local economy is huge. Not only do people benefit from having a wage but so many other local firms, not to mention the tax payer benefit to the local council experience an upturn in their fortunes. However, the same can be said in the opposite direction and if a firm decides to move away from a region, there can be difficulty for a great number of people.

In early 2009, Bombardier announced that they would have to make a number of job cuts across the board in order to maintain their financial equilibrium and status. It was announced that almost 1,000 posts at the Shorts facility in Belfast would be shed with over 300 employees being released from their jobs. The remaining posts that would be lost from Short would come from short contracting work, and this can be a huge impact on the local economy. These jobs will be heading to China, as yet another employer heads East to Asia as China looks to move up the chart of outsourcing nations. India is currently the top nation with regards to outsourcing but there is no doubt that China has the potential to take over this position. As the lure and benefits of outsourcing becomes ever more important and vital to a local economy, the battle for outsourcing jobs could become even more intense.

If this turns out to be the case, it is likely that nations such as China will be able to exert a higher level of pressure but the smaller nations could be able to offer lower wages. Depending on what the firm really wants from their outsourcing contract, there is still scope to find the right partner but it may be that the familiar faces take a greater control of the situation.

It seems as though barely a week is going by without some local council having a major decision to make about outsourcing deals. The latest council in a conundrum this week is based in England in the United Kingdom, with Herts facing a major split about their plans to outsource a great deal of the local council services. It has been said many times before but the fact that anything that involves jobs and employment at this current moment in time is going to be extremely emotive and will cause a lot of concern for people based in the local economy. The threat of job losses is very strong and there is not much optimism to get another job in the local region so many people believe that the local council should feel duty bound to provide jobs to the local economy. Providing jobs to the local economy will provide further benefits in a greater level of expenditure with shops and service providers noticing a benefit. There is also the fact there is less pressure being placed upon the benefits agencies so it can be seen that using the outsourcing capabilities so often used by big business is not always the answer for a local council.

However, it is the benefits that fall to big businesses that mean a local council like Herts needs to be considering the benefits that arise from outsourcing. By outsourcing IT and HR services, Hart District council believes that they can save around 10% of their budget at a stroke and given the uses this money could have, it is clear why it is of benefit. Utilizing outsourcing could ensure that a greater amount of money is able to be placed into the local health services or improving the roads and that is what the council is trying to achieve.

However, although the fact that 10% of savings could be made, across the board this amounts to about £5 for each constituent in the local region and some argue that this is not a large enough saving to justify switching the work. It needs to be remembered that when the council gives away its power over these issues, it could leave itself open to a poorer quality of service. Given this option, many people would prefer to pay an extra £5 per year in order for the local council to maintain control over its services. Whilst Hart District council would ensure that contractual agreements contained agreements and guarantees about the services that would be offered by the outsourcing firm, it would be impossible to guarantee everything. Given the fact that it would be run by a business who would be primarily concerned with profit, it is inevitable that certain services may find a dip in quality.

The positive and negative benefits allied to outsourcing really comes to a head when using outsourcing as a solution for local councils and it is easy to see why local Unions like Unison are up in arms about the consequences which may arise from this decision being made.

If outsourcing is being used to help a firm produce a better quality of products or lower their own costs, the people affected by are it are very close to the production level. There will obviously be an emotive impact on anyone who loses their job due to an outsourcing decision and their immediate families will be affected but that’s usually about it. This makes it more straightforward to undertake a cost benefit analysis on the impact of outsourcing and if a firm is making a decision, they can have the final say using price as their bottom line. This is why outsourcing has become so popular in recent years as it offers companies a fantastic opportunity to reduce their costs and improve the standard of service they offer to consumers.

However, when a local council is looking to outsource a number of its key provisions and services, there can be a far greater issue to deal with. Outsourcing can be used for any task imaginable, not merely for telephone calls or product manufacturing and a council in English is looking to take an innovative step in outsourcing which has not been warmly received by everyone in the local community. Buckinghamshire County Council are looking to stop employing home care social workers directly in a move that will hopefully save the cash strapped council a considerable amount of money. This means the council is looking to outsource its provision of social workers for old aged pensioners and disabled people. This is clearly an issue that has gotten people up in arms and has caused disquiet and unrest amongst local citizens. Although not everyone in the area will know someone who is immediately affected by this decision, this sort of decision is one that interests many people and is sure to spark debate amongst local citizens.

It is easy to see why the council have taken this move as the provision of specialist and potentially around the clock care can be extremely expensive and is no doubt a drain on resources. However, it is a cost that most people are happy to have provided to those who need it most and cutting back this service would be low down in the list of priorities for many residents. There is a fear that the cost cutting exercise being undertaken by the council will lead to an inferior service being provided to those who rely on the social care and support and this could have a hugely negative impact on their standard of living. The credit crunch is affecting everyone and whilst councils have a duty of care to obtain the best quality services for as low as price as possible, the people who rely on the care are also owed respect and the best provision of help that can be afforded.

Outsourcing is a fantastic tool for businesses and organizations that need to lower their costs but it is clear that in certain areas, a deeper level of consideration has to be entered into. The financial aspect of outsourcing is always vital and a great way to initiate investigations into the benefit of outsourcing but sometimes there needs to be a study of the wider picture where outsourcing is involved.