Monday 17 August 2015 8:16 pm

Why the government should take outsourcing a radical step further

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Government raids on the methodology of business are commonplace. Some are more successful than others. But as the challenge of George Osborne’s edict to contemplate departmental cuts of as much as 40 per cent sinks in, the search will intensify.
As I sat recently in the splendidly refurbished BT Tower – a guest of this august publication – a thought struck me.
The Tower is still an iconic arm of the telecoms giant, reaching into the skies of north London. It rotates at a gentle rate, fast enough to be aware of it, but slow enough to allow thought.
Our lunch, a splendid array of fine vitals, was cooked, served and presented by Compass people. Compass is a giant of the contract catering industry, which I know a little of through my work with their splendid trade association Arena.
Over the years, I have conducted a series of interviews for them; my guests have included such luminaries as my friend and old boss Charles, now Lord, Allen, who ran Granada when it was as much into food and hotels as it was Corrie. Ironically, they also included Ian Sarson, group managing director of Compass.
Contract catering is a classic example of a sublet industry: they do, more cheaply and more efficiently, stuff that is secondary to the core business of an enterprise but vital to its functioning and to the contentment of its staff.
In the old days, sandwiches and hot drinks at breaks, cheap and cheerful meals at lunchtime, and hot food for the night shift was about as good as it got.
Staff became restless; they’d slip out and buy better snacks from the high street from superior enterprises such as Pret a Manger; or they’d bring their own food while the business still paid for food and drinks to be available.
Time wasted, satisfaction in decline, managers forced contract caterers to improve or contracted better contractees. Simples.
A downmarket, make-do sector sparked into life and fresh faces, running their own operations, like BaxterStorey, came into play. They chewed at the heels of the down at heel bigger boys. Competition is good and it worked.
It was a successful formula for mass manufacturers like Ford but, in time, everyone liked the service, the fall in overheads, and the growing staff satisfaction with this “benefit”.
Today, from the Bank of England and Lloyds to, yes, the BT Tower, contract caterers rule.
The real revolutionaries, however, are groups like Sodexo and individuals like Bill Toner, who recently merged his HCM Group with CH&Co. They take it a radical stage further.
Whatever isn’t core to an enterprise, anything, they’ll do.
Catering, yes; but laundry, site management and security, transport, communications and so on. Cynics will caution about G4S, with flour on their jackets, but one bruised apple doesn’t kill an orchard.
So, if the government is poised to do another radical raid on the intellectual property of business, why not look a little more deeply at the methodology of the contracted-out sector? What more, that is currently done by various government departments, could be done by a private sector contractor?
We are already awash with agencies and contractors carrying out functions previously orchestrated by Sir Humphrey and his legions of minions. There are, of course, areas with sensitivities of security and humanity that may rule such a move out. The Atos debacle is instructive and few, if any, would suggest the work of MI5 and MI6 should be sublet.
But what would Deloitte or PwC, on a budget and charged with making a “turn” for partners, make of the labyrinthine inefficiencies of HMRC?
Might government communications be clearer, slicker and more efficient if Edelman or Weber Shandwick had a look?
There are other enterprises that might equally look at agriculture, communities, even education and training.
Thinking the unthinkable is sometimes worth doing; but only, of course, if the person hearing the results of that process is listening and has an open mind.
Alastair Stewart is a journalist and broadcaster.

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