Numerous companies from the private sector outsource certain tasks or entire departments to external service providers. Public administrations in Germany are still lagging far behind this development. The German government already presented a digital agenda in the summer of 2014, but the implementation of digitization and outsourcing in public administration is progressing only slowly. Outsourcing is particularly worthwhile in the commercial sector. External service providers create payslips for public sector employees reliably and cost-effectively. Travel expenses can be settled quickly and legally compliant by a company specializing in this field. In finance and accounting, external controllers often work more effectively than in-house employees.
The current situation in public administration
Authorities and administrations in Germany handle a large number of commercial processes every day. The federal, state and local governments are faced with the problem that the current type of processing causes high costs and sometimes takes a very long time. Many work processes are processed analogue. Due to the national debt burden, there is a lack of funds for the digitization of processes. Digitization and outsourcing represent a sensible strategy for the public sector to speed up the processing of citizens’ concerns and internal events and to reduce costs.
Another obstacle is the age of specialist staff in public administration. Today, around three-quarters of all employees in the public sector are already 35 years old or older. Due to demographic change, the proportion of employees over 60 years of age will triple by 2060.
The public service must overcome these hurdles
Authorities and administrations are reluctant to modernize and outsource because these changes initially cost money. Due to limited budgets, the heads of the authorities are refraining from implementing the necessary measures. In order to keep other election promises, politicians are postponing such plans for a few years. The expenses pay for themselves after a short time because the administrations work faster and more efficiently and increase their productivity.
Many offices still work very decentrally. Important tasks in the areas of human resources, IT, purchasing or controlling are carried out twice because they are carried out by different departments. Here, too, a rethink must begin among employees and rigid structures in the personnel area must change. The authorities are in direct competition with the private sector to find experts for the introduction of digitization and outsourcing. Many employment contracts in the public sector are fixed-term and the former job security is no longer given due to ever new cost-cutting measures.
Another hurdle to outsourcing certain tasks and business areas is legal admissibility. German administrative law distinguishes between voluntary and compulsory self-government tasks of the municipalities. In addition, there are mandatory tasks according to instructions, which are subject to the technical supervision of a higher-level authority. Mandatory tasks according to instructions must always be carried out by the responsible municipality and may not be outsourced.
The situation is different for voluntary and compulsory self-government tasks. These tasks serve to meet cultural, social and economic requirements for the basic supply of the population. In order to fulfil the self-administration tasks, the municipalities can decide whether to process the necessary work occasions themselves or whether to hand over the business transactions to an external provider. In the context of the subsidiarity concept, the authorities must examine whether a private company can perform the tasks more effectively and economically.
How do you see future developments in the public sector? We look forward to your comments.
Image source: Fotolia.com, Photographer: everythingpossible
