Imagine the scenario when you are asked to take on an outsourced project for £10m per year based on current economic situations, factoring in forecast rises in the economy to cope with salaries, operating costs and coping with the unknown.
Then imagine the funding cuts to deliver the service is reduced to £9m per year and the costs rise (minimum hourly rate, inflation due to Brexit fears etc) meaning its financially uneconomical for the outsourcer to continue.
Recently the BBC ran a story regarding this exact problem with the Care Home industry, with finding staff to be the main problem. This is what’s happened with care home contracts within 95 UK councils across Britain, as the outsourcers simply can’t work with the budget cuts. Even if they’re given a small rise in the contract cost, in some cases, it just doesn’t work. One of the main factors was the inability to attract and retain staff in an ever more costly world. If you can’t provide good, quality, security checked staff, then you simply cant operate.
People are the most powerful tool in any business, but the cost to employ is sometimes overlooked in outsourced contracts. We cant rely on ‘cheap labour’ as the saying goes ‘Cheap is Expensive’, however, this statement on cheap labour shouldn’t be used at all. If someone is willing to complete the work for below the minimum wage, the outsourcer shouldn’t offer them the service. They should attract the best talent, skills, care possible. Always.
If the government’s allocation for care is reducing, but costs rising, some outsourcers will take shortcuts and not vet, check and validate someone’s identity as it might be too ‘costly’, care could be provided by unqualified, skilled personnel.
Care is critical to get fight for our aging population, however it seems we are going backwoods with the successful allocation of outsourcers….