As outsourcing of services by councils gathers speed a survey shows concern about how to handle the governance issues.

According to the FT outsourcing has risen from £9.6bn in 2008 to £20.4bn in 2012.. It is estimated that it could reach £101bn by 2014-15. More than 20 per cent of contracts in 2012 came from councils. About half of council waste management services are now privatised, as are 23 per cent of human resources, IT and payroll functions.

As councils move from being service providers to commissioners of services it is vital that governance arrangements keep pace with this development. But a survey by business and financial adviser Grant Thornton found that 21 per cent of respondents to their survey lack confidence over the clarity of roles and responsibilities when working in partnership with others. This is an increase from 11 per cent last year.

Commenting on the survey findings, Paul Hughes, Director and Public Sector Governance Lead at Grant Thornton UK LLP, said: “Good governance supports council leaders in making the correct decisions, reduces the likelihood of things going wrong and protects them if problems do arise. While our findings suggest there is more councils can do to embed successful governance processes, encouraging progress has been made.

When considering how to improve governance, councils need to think wider than systems and processes and build a culture supportive of good governance. This is essential for embedding effective governance frameworks whilst focusing limited resources on the greatest areas of risk.”

“Increasingly, in a resource constrained environment, councils will need to focus on getting more for less from their governance arrangements. They will also need to meet the challenge of implementing robust and proportionate governance arrangements for new service delivery models to retain accountability without stifling innovation.” said Hughes.