Top 6 Reasons Why Local Authorities Should Micro Outsource

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UK government funding of local authorities is being severely cut. Micro outsourcing can help local authorities bridge this funding gap. But micro outsourcing offers more than just cost savings. This article describes the top 6 reasons why local authorities should micro outsource.

What are the UK government’s local government plans?

As part of the Coalition Government’s deficit fighting 소액결제현금화 measures, it announced that local government funding would be reduced by 28% over four years. In 2011-12, 9.9% would be cut with a further 7.3% cut in 2012-13.

The Local Government Authority, which represents councils in England and Wales, has calculated that the real cut in 2011-12, once the police grant was excluded, was closer to 12.1%, meaning that central government funding for council services was being reduced from £28.3bn to £24.9bn.

What does this mean?

In short, local authorities are being challenged to provide the same quality of frontline services, e.g., domestic waste collection, but with much less money from the Government. To bridge this £3.4bn funding gap, local authorities are exploring various measures that could help them reduce their costs. Could micro outsourcing be one such measure?

What is micro outsourcing?

Micro outsourcing, or micro sourcing, allows organisations, e.g., small and medium-sized enterprises, public sector bodies and third sector organisations, to outsource work to highly skilled freelance workers or independent businesses (service providers) based locally, nationally or anywhere across the globe.

This is distinct from traditional outsourcing where organisations engage in mega deals over several years with global outsourcers for multi-million or more contract values.

Why should local authorities micro outsource?

Micro outsourcing shares many of the benefits of outsourcing but also offers some new ones, too. The following describes the top 6 reasons why local authorities should micro outsource:

1. More efficient processes

In common with outsourcing, micro sourcing enables organisations to gain process efficiencies and increased effectiveness, as activities and processes are performed by service providers with specialist skills, know-how, best practices and up-to-date technology & equipment.

2. Delivers cost savings

Micro outsourcing reduces overhead costs and capital expenditures. For example, by micro outsourcing, an organisation could save on not only salary costs but also pension and other benefit costs. With a reduced headcount, other cost savings could include office space and equipment costs, which has a positive effect on an organisation’s cash flow.

3. Deployed resources are competitively priced

With micro outsourcing, service providers bid for your jobs. This ensures that your costs truly reflect the service provided. The process could be likened to eBay. However, unlike with eBay, the price you pay goes down rather than up!