One of the challenges is the difficulty of accurately calculating the full cost of providing services , including indirect costs such as overheads and capital costs ( Gosselin & Journeault 2022 ). Another challenge is the potential for pricing as unfair by ratepayers who are required to pay more than they did under previous pricing models leading to a number of services being priced out of reach for those on low incomes . This could be a detriment to local government communities where there is the potential to displace residents to other communities with more affordable pricing models ( Beecher 2020 ). Unchecked , unplanned and uncoordinated there is a risk Queensland local governments could possibly outsource their competitive advantages ( Alshumrani , Munir & Baird 2018 ).
OBTAINING MORE DATA : NEXT STEPS IN THE STUDY This paper is the first report of a study aimed at filling the gap in the literature around full cost pricing and outsourcing . The next stage will examine data from local government CEOs and management that deal with these issues on an operational basis . All 77 Queensland councils have been approached to be surveyed and interviewed across a range of questions seeking to gain insight into what are the key services that are outsourced and what the basis for that crucial “ make or buy ” outsourcing versus internal delivery decision is made . Queensland has some differences and similarities with other states , the primary contextual factor being that Queensland is nearly fifteen years into a paradigm post local government amalgamations . We can assume there are implications for larger LGAs especially those in the regions .
LIMITATIONS AND AREAS FOR FURTHER RESEARCH Further research could collectively link organisational issues to sector issues at an industry , state and national level given outsourcing and full cost pricing functions are managed at an organisation level of local government ( Harland et al . 2005 ).
Social considerations such as those associated with the wage reductions ; increased work intensity ; reduced service quality ; cost shifting ; and the abandonment of community service do not appear to be captured in the literature thereby providing an opportunity for further research ( Davis
& Rhodes 2020 ). Full cost pricing reforms in the local government have been introduced to mirror the operations of the private sector without full consideration to the social obligations of local government meaning there is an excessive emphasis on costs and less on user capacity to pay . The dissimilarities between local government and the private sectors make it challenging to contextualize full cost pricing and outsourcing where little public sector information exists ( Gantman & Fedorowicz 2020 ). A looming major area for further study will be to include externalities , particularly environmental degradation , into evaluations .
Social considerations such as those associated with the wage reductions ; increased work intensity ; reduced service quality ; cost shifting ; and the abandonment of community service do not appear to be captured in the literature thereby providing an opportunity for further research .
CONCLUSION Outsourcing is aimed to help local governments to reduce costs and enhanced service delivery however the implementation of full cost pricing should be approached with due diligence by each local government . Criteria for selection of services for outsourcing could include complexity , criticality , the availability of qualified contractors , and social and environmental impacts .
Reported benefits of full cost pricing include financial sustainability , transparency , and efficiency ( Drew 2020 ). challenges include accurately calculating the full cost of providing services and the potential for pricing to be perceived as unfair particularly by those who can least afford to pay for services . There is minimal evidence of the benefits of full cost pricing in Queensland local governments
With a third of Queensland local governments being classed as “ at risk ” or “ unsustainable ” despite the adoption of full price costing , there is likely to be even further emphasis on cost savings and productivity . Given outsourcing has traditionally been implemented in a shallow form and with no strategic intent , minimal is known about the consequential affects ( Domberger 2008 ). Decisionmaking on outsourcing needs to be based on robust evidence of the benefits and rigorous evaluation .
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