Is it time for the police to think again about outsourcing?
As the global economy emerges from the pandemic, the UK has seen a spate of corporate takeovers. A key consideration during any acquisition is the ‘fit’ between the two organisations and the need to avoid stretching too thin and too far. There’s always the risk that, as a company diversifies, it tries to be good at too many things and ends up being unsuccessful. Here, Neil Amos argues that the diversification of policing has brought with it similar risks - and that reopening the question of outsourcing routine back-office functions may be an answer.
The stock market is an excitable place at the best of times, but recent activity has seen it reaching new levels of giddiness. Not only are shares and investments powering back towards pre-COVID-19 levels, but also global investors are looking at the UK and seeing that companies here are still relatively undervalued: undoubtedly a legacy of pre-Brexit anxiety. As a result, the level of acquisition activity, companies buying companies, is at a level that has not been seen for several years.
Exciting and profitable as this may be, it also carries risk, not least when the companies do different things. Writing in The Times, recently, Patrick Hosking highlighted the risk of diversification - recalling the time in 1987 when the advertising agency, Saatchi & Saatchi revealed tentative plans to buy the, then, Midland Bank. He asked whether it was better for companies to focus their efforts on being good at a limited number of things - to ‘stick to the knitting’.
The challenge of diversification in policing has come about in a different way but nevertheless, it’s real. If you look at the organisational structure or annual report of a police force from the late 1980s, you’ll see a much simpler organisation. Since then, a combination of the digital transformation of our world, rising public expectation and hugely improved understanding of vulnerability have led forces to become much more complex entities. Ask a chief constable of those years about MOSOVO, RASSO, MAPPA or CAIU and they probably wouldn’t know what you were talking about but today we decipher these acronyms to discover serious and complex risk management activity.
A common strategy in the corporate world has been for companies to work hard on focusing on their core value proposition – the things that they want to be really good at – and find other ways of dealing with everything else. One of the most common ways of achieving this is to outsource non-core activities. It is rare to see companies managing payroll, supply chain or pensions in-house. This is because it tends to be an expensive distraction from what they need to be really good at, to survive and thrive. And when brand new specialisms come along, such as digital marketing (or digital forensics), many organisations decide to leave them to the experts rather than become experts themselves.
The public sector relationship with outsourcing has been cooler and in policing it’s been very hesitant indeed. In the early years of the coalition government, some momentum built with outsource deals for a range of services signed in Cleveland, Cheshire, Northamptonshire, Lincolnshire, Avon & Somerset, and Staffordshire. They were all launched with plenty of fanfare as chiefs and PCCs extolled the benefits of putting these functions in the hands of companies that were expert in delivering them. Yet today, each of these broadly-based partnering deals has gone, and instead, services have been brought back in-house.
Other forces have had more success, generally where the focus of the deal has been on a specific function – there have been clear and repeated savings in areas such as fleet and aspects of HR, although there have been many teething troubles along the way. Perhaps, even in outsourcing, it pays to be focused on a smaller range of activities that you really want to excel at.
The world has changed massively since the police outsourcing deals of a decade ago (both in policing and outside) and if the new intake of PCCs were inclined to reopen the question of private sector partnering, they would probably want to approach it differently. We now know more about the partners who are most likely to deliver success and we have also learned a great deal about different partnering models. There’s every possibility that newer, more agile partnering approaches may work better with a policing community that will be in tune with the need for adaptability.
We recently carried out a survey on outsourcing trends where we asked organisations across sectors about their plans over the next couple of years. The survey tested the assumption that, under financial pressure from a post-COVID-19 dip in the economy, leaders would want to have a sharp focus on the areas that they need to excel at whilst leaving non-core business to organisations that can do it effectively and at a lower cost. The findings were very surprising. In sectors like manufacturing and chemicals, the survey found that almost 60% of companies are planning to outsource more - none were planning to reduce their outsourcing activity. Similarly, in financial services, almost half of companies plan to press hard on the outsource pedal, with only a shade over 10% planning to reduce outsource activity.
The picture in the public sector could scarcely be more different. While a fifth of public sector bodies said they would be looking at more outsourcing, 36% said that they planned to bring services in-house, and that from a base that is already less outsourced than the corporate world. There is an identified range of activities in which an outsource partner needs to excel to keep a customer satisfied: proactivity, flexibility, transformation, delivery quality and price are all important. Industry, it seems, is confident that there are partners out there who can deliver to their needs – policing doesn’t seem so convinced.
This begs several questions for policing as it prepares for what is undoubtedly going to be a financially challenging period. The first is just how many areas can the modern police force afford to be really good at - how many services and capabilities really need to be kept in-house? Secondly, why has outsourcing been so relatively unsuccessful in the police service when it is so universally recognised as adding value elsewhere? Is there more that could be done to help policing develop the skills, information and culture to enable it to outsource effectively and help the private sector better understand what policing needs from it?
Experience teaches us that organisations often ask these questions at the wrong time – with expensive consequences – once the need has become acute. Now is the perfect moment for our highly diversified police service to think again about its core value proposition: what it can afford to be good at in the years ahead. Is it time to “stick to the knitting” and think again about outsourcing in policing?