A key rationale behind outsourcing was to make local government more efficient by shifting the accountability for managing resources particularly financial risks to contractors while enabling local government to retain control over service delivery operations ( Eckersley & Ferry 2020 ). Critics of full cost pricing would suggest that local governments have not realised the long term benefits or pitfalls of outsourcing . The approach to outsourcing could sometimes be seen as a mechanism for not dealing with internal problems , rather transferring operational risks outside the local government ( Jarred 1997 ). Existing literature contains little evidence on the strategic and holistic issues of outsourcing on the Queensland local government industry instead only being measurable at an organisation level ( Loosemore , Alkilani & Mathenge 2020 ). Without this information , it is difficult to determine the effects of outsourcing on Queensland local governments operations .
EXISTENT LITERATURE ON FULL COST PRICING FOR AUSTRALIAN GOVERNMENT A literature search was undertaken to locate published evaluations of full cost pricing and outsourcing in local government from 1990 ’ s to 2023 . 1990 was chosen given it was a period when the Federal Government committed to the Competition Principles Agreement and the Agreement to implement National Competition Policy which captured full cost pricing and outsourcing ( Margetts 2012 ). Tables 3 and 4 below outline some of the key literature references for the topics divided into government Full Cost Pricing and Outsourcing research specifically .
DISCUSSION Advocates of outsourcing claim that it permits organisations to reduce costs , increase productivity and access specialised expertise readily ( Gray , Helper & Osborn , 2020 ). They also believe outsourcing creates jobs in communities where outsourced work is undertaken subsequently contributing to economic growth and development to communities ( Widyorini & WL 2022 ). These traditional views may be more driven by ideology rather than the outcome of analysis of the advantages and disadvantages of specific outsourcing activities of local government operations ( O ’ Flynn 2008 ). It is important for local government to scrutinize the pitfalls and benefits of outsourcing prior to deciding to participate in outsourcing implementation ( Moller , 2020 ).
Table 3 - List of key papers identified for Government Full Cost Pricing
TITLE On the optimality of the full-cost pricing .
The roles of costing and cost allocation in the new public service regime in Australia .
Addressing affordability as a necessary element of full-cost pricing .
Competition policy and local government in Queensland . National competition policy and local government .
TITLE
Outsourcing practices have the ability to damage the operations of a local government contributing to the loss of employment , poorer working conditions and lower wages for workers in local government communities ( Sasse et al . 2019 ). Outsourcing can reduce service delivery and the quality of outcomes in favour of the prioritisation of cost savings ( Sasse et al . 2020 ). Deliberations over outsourcing can be complicated with arguments for the advantages and disadvantages ( Griffith & Figgs 1997 ).
The literature strengthens a view that Queensland local government outsourcing in regional , rural and remote local governments can be counterproductive given the lack of competition and contestability in these geographical locations ( Hansen 2019 ). outsourcing in rural , regional and remote areas can have the effect of replacing a local government monopoly with a private one given the lack of contestability in these areas ( Stone et al . 2020 ).
AUTHOR Th ´ epot & Netzer Funnell & Ahmed
Mehan & Gansler
Jarred
Table 4 – List of key papers identified for Government Outsourcing
Outsourcing : assessing the risks and benefits for organisations , sectors and nations .
Service outsourcing decisions – a process framework . Extreme outsourcing in local government . At the top and all but the Top . Public sector contracting : Does it work ? Outsourcing in the public sector .
The separation / specification dilemma in contracting : The local government experience in Victoria .
Trade union responses to outsourcing in a neo-liberal environment : A case study analysis of the Australian public sector .
Critical Comment on the Analysis of Shared Services in the Queensland Local Government Association ’ s Size , Shape and Sustainability Program .
Locating the ‘ local ’ in accounting and accountability for Australian local government outsourcing decisions .
Local Government Division , Department of Infrastructure
AUTHOR
Harland , Knight , Lamming & Walker
Taponen & Kauppi Bradbury & Waechter Bradbury & Waechter Domberger Figgis & Griffith O ’ Flynn & Alford
Teicher , Van Gramberg & Holland
Dollery & Akimov
Bisman
Advocates of outsourcing claim that it permits organisations to reduce costs , increase productivity and accesses specialised expertise readily . They also believe outsourcing creates jobs in communities where outsourced work is undertaken subsequently contributing to economic growth and development to communities .
Outsourcing is claimed to have the potential to create new jobs such as project management , coordinating , performance monitoring and evaluation ( Mubangizi 2019 );
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