The Metropolitan Police Service (MPS) lacks the commercial expertise to negotiate good deals for outsourcing its back office services, a report from the London Assembly has concluded.
The report comes as the MPS is to announce that 445 members of staff posts will transfer to a joint venture part-owned by French outsourcing giant Sopra Steria.
The MPS has been consulting on plans to outsource back office functions since the Mayor’s Office for Policing and Crime announced that the force will have to make £800 million pounds of savings by 2020.
The Assembly’s Budget and Performance Committee (BPC) report, published on September 30, warns that plans to contract out services to the private sector present huge risks and says that unless the force improves its commercial expertise, it risks a high-profile outsourcing failure similar to the G4S and Serco electronic tagging scandal – where the firms were overcharging the Government to tag offenders.
In June, members of the committee were told the MPS should consider internal options before outsourcing services to the private sector and must have "absolute clarity" on what its objectives are.
The report summarised that unsuccessful deals might not make the savings the force needs and could put its performance at risk.
It also noted that, while the MPS is initially focusing on back-office services, Commissioner Sir Bernard Hogan-Howe has said “all but core policing functions” must be evaluated to determine whether external contractors can provide services at better value. This potentially paves the way for a radical transformation in the way services are delivered.
Currently, the MPS is paying auditors PricewaterhouseCoopers £13 million to help with its commercial strategy.
The committee recommends the MPS build its own commercial expertise, which it says might involve paying competitive salaries and building career paths to attract the right mix of staff.
It was critical that the MPS currently does not have enough staff with the right skills to negotiate and manage contracts effectively and says without it there is a risk that contracts will fail to deliver value for money.
Chair of the BPC John Biggs said there is a “real risk to the public“ if the MPS signs a bad deal.
“The MPS could find itself handcuffed to a poor contract or even worse if the deal goes wrong. In particular, it must ensure it has the business nous to find the right commercial partners and then manage contracts effectively to ensure Londoners’ money is spent wisely,” he said.
“The stakes are very high – no-one wants to see yet another high-profile outsourcing botch.”
A MPS spokesperson said: “The report highlights a number of key findings which the MPS recognise. Several of the recommendations will require a more detailed assessment before they are agreed.
“The report highlights the critical need to get all elements of the commercial life cycle right. The illumination provided will be valuable in further improving the commercial strategy and helping the MPS meet the enormous challenge of the next spending review."