News: Rupert Soames OBE gives speech introducing the Serco Institute

Rupert Soames OBE and CEO of Serco Group plc introduces Serco's research and innovation arm

 

''Over the last 18 months the sector which Government relies on to deliver so many of its services, and which employs around 1 million people, has been turned into a blasted heath, with value destruction in relative terms on a scale similar or greater to that seen in the Financial Sector in 2008.

Having led the world in the development of the private provision of public services, the sector now looks a sorry sight compared to the proud battalions of outsourcers who marched the streets of Whitehall and Local Government in the 80’s 90’s and 2000’s.

This state of affairs is the consequence of poor behaviour by both customers and suppliers.  On the suppliers’ side, it was the hubristic belief that “anything you can do, I can do better” and on the Government’s side it was the belief that, if one of the purposes of outsourcing was to transfer risk, then the more risk that was transferred the better.  Both parties carefully perched their bottoms on top of their own petards, and pulled the firing-pin.

The consequences of the mistakes of both customers and suppliers are now visible, and although the impact on the supply-side may be more obvious, the impact on Government may be longer-lasting, as its supply chain withers, forced to do so by capital markets who as recent events have shown are currently disinclined to support the sector with either working capital or long-term investment.

 

What to do about it?

Well there is some good stuff going on.  Earlier in the year, Serco published our 4 Principles, which set out some ideas of how to improve behaviours within the market and make it a safer space for both customers and suppliers.  The Cabinet has set up an Industry/Government roundtable, and David Lidington has made clear in absolutely straightforward terms the commitment of the Government to continuing to use private companies in the delivery of public services.

His view that the role of Government is to ensure that high quality and resilient public services are provided on the basis of best value to the taxpayer, and that the Government should be agnostic as to whether the method of delivery is public or private, makes perfect sense is all that the private sector should expect.

Which brings me to the Serco Institute, which we are re-launching today.  The purpose of the Institute is to be a forum where academics, civil servants, practitioners, companies small, medium and large, including our competitors, both in this country and abroad, can contribute their ideas.  It recognises that developing improved ways of delivering public services is not simply a matter of process design, it requires BOTH an intellectual underpinning and also a base of facts and experience.

One of the great failures of my industry has been to forget that on the tin marked “Public Services”, it does not say “made by the private sector”; we have forgotten that the private sector needs political permission to operate in this space.  We have forgotten that the reason why private companies came to deliver public services in the 1980’s was because serious people thought it would improve the delivery of public services, and they believed this because serious academics and economists and industrialists persuaded them that it was so. 

I also want to say what the Serco Institute is not.  Despite its name, it is not going to be a paeon of praise to the achievements of Serco in public service.  Neither is it going to be a platform for Fat Cats and their fathers that begat them.  It is going to be, genuinely, an attempt to develop Crowd-Thinking for Government Services provision.

The provision of public services by private companies faces question and challenge from people who are neither ill-intentioned nor stupid, and we as an industry will be fools if we do not respond constructively to our critics.  And that means with thought, and fact and deed, and with energy, clarity of thought, and respect.''

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