Public servants lagging private sector productivity, outsourcing criticised

Wednesday 5th February 2014

Lower quality and higher costs have been experienced as a result of outsourcing, 44 percent of public service workers say in the latest New Zealand Productivity Pulse from accounting firm Ernst & Young.

The survey suggests the gap between productivity levels in the public sector compared to the private sector totals around $280 million a year.

EY also found public servants strongly doubted the effectiveness of outsourcing, which 44 percent of those surveyed said actively reduced productivity, while only a quarter of private sector employees surveyed took that view.

The report says public servants see outsourcing growing and ultimately leading to higher costs.

"Policymakers often assume that government service delivery inherently will be more efficient under the superior management practices of private operators," said EY government and public sector practice leader Alan Judge said in a statement. But outsourcing often failed to consider the complexities of many government services.

There was evidence that poor planning and management, and challenges in managing resources were holding back workers who could be highly productive, he said.

Some 52 percent of public sector workers are sitting below the national productivity average, compared to 39 percent of private sector workers, according the survey of 750 public and private sector workers.

"With nearly 30 percent of public servants experiencing some form of outsourcing, the productivity of the public sector will continue to reduce," said Judge.

However, overall productivity levels across both the public and private sectors improved in the latest release of the bi-annual survey. Based on a 10-point scale, New Zealand's productivity increased from 7.49 to 7.54 in the past year, up from 7.3 in February 2012, the Pulse survey found.

BusinessDesk.co.nz

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