Labour policy chief calls for end to private outsourcing

Private sector companies driven by “corporate profit” should not be given government contracts, the Labour policy coordinator Jon Cruddas has said in a new book.

Setting out his plans for Labour in Blue Labour: Forging a New Politics, due to be published next month, Cruddas says government should focus on forging ties with “ethical enterprise” rather than outsourcing services to private firms.

In a chapter entitled ‘The Common Good in an Age of Austerity’, which has been seen by The Telegraph, Cruddas writes: “[There should be] no more outsourcing of relational services to those parts of the private sector that are driven purely by corporate profit rather than a social purpose.

“It is quite staggering that some £10bn of public contracts – of taxpayers’ money – are allocated to some 20 private companies.”

He adds: “Rather, we need to forge cooperative ties with ethical enterprise – such as cooperatives, mutuals, and social businesses.” 

Research published last week showed that local government outsourcing contracts signed in 2014 were worth a total of £606 million, with a 60% / 40% split between business process and ICT outsourcing deals.

Overall, the average value of local government outsourcing contracts increased by 15% year-on-year to £30.3m during 2014.

Colin Marrs

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