This new CIPFA Insurance Network workshop showcased how insurance and legal teams in public bodies need to adapt to the recent trend to insource previously outsourced services. Following the catalogue of failures to deliver vital public services, the collapse of leading outsourcing corporates and the realisation that ultimate risks firmly remain with the public sector, organisations are increasingly looking at bringing services back in-house (a recent report suggested that 77% of UK councils are planning to bring services back in-house over the next 2 years). Whilst this may be a pragmatic way to cut costs and improve quality, it is critical that organisations and practitioners do not repeat the same mistakes when setting up new arrangements (often services are delivered through trading companies).
The workshop considered the changing risk profiles that public sector organisations encounter when outsourcing or insourcing key services and how these risks can be sufficiently managed and mitigated. It also highlighted the impact of the changing role of directors, officers and managers under these new arrangements. They constantly walk a fine line, making tough and complex decisions. However, any breach of duty could expose them to personal liability and have a potentially devastating impact on the organisation and the individuals concerned.