BUSINESS

Post-Carillion: mitigating the risks of external contracting

Despite Carillion's collapse, external contractors remain a cost-effective way to deliver services, but councils must take a risk-based approach to tendering to mitigate some of the dangers, writes Rod Penman.

The recent liquidation of Carillion has brought fresh scrutiny to local authority use of outsourcers. However, experienced procurement teams and risk managers have decades of understanding on how to access the benefits of external contractors while effectively mitigating some of the risks posed.  

Local authority use of outsourcers such as Carillion or Capita allows access to specialist expertise and scale. However, council-outsourcer relationships are often driven by the need to find new ways of delivering services more efficiently in the face of immense pressure to cut costs.

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