Spending Review: Firms hopeful of new opportunities

Infrastructure services firm May Gurney said it was well placed for the future

Opportunity or threat? For hundreds of private firms in the East of England, the government's Spending Review is more the former than the latter.

Yes, the budgets of local councils and other public bodies will be slashed.

But as the public sector looks for more efficient ways to deliver services, private companies are looking to pick up contracts worth hundreds of millions of pounds.

The infrastructure services firm, May Gurney, has been quick off the mark.

For years the Norwich-based company has been a market leader in local government "outsourcing", where a contractor carries out a service for an authority.

May Gurney looks after highways maintenance for Northamptonshire, Essex and Norfolk county councils, among others.

Chief executive Philip Fellowes-Prynne said: "We are well placed as the comprehensive spending review measures are announced.

"We have grown by 50% in the past five years, mainly through outsourcing services, and I expect that to continue over the next five years, hopefully doubling in size.

"I see that business coming from highways and environmental services as we drive for increased and improved recycling."

Mr Fellowes-Prynne says outsourcers provide better value for money chiefly because they are better managed and more focused than conventional providers.

Suffolk County Council plans to outsource the bulk of its services - everything from care homes to libraries.

It sees the use of private contractors and the voluntary sector as the best way of cutting bureaucracy and living within a reduced budget.

Sarah Howard runs Sarand Business Software near Haverhill which already provides software to Addenbroke's Hospital in Cambridge under an outsourcing deal.

Commenting on Suffolk's plans she said: "Potentially this is a massive opportunity for small and medium-sized companies, so long as the council does the outsourcing in the right way.

"We need to make sure we have access to the tendering process and it's not just restricted to larger companies.

"If we get access, we as small companies can keep the work within the community."

With so much change being driven through the public sector, it is no surprise that consultancy firms are keeping busy.

Cambridge Consultants based on Cambridge Science Park, is advising organisations on how to do "more with less".

Consultant Arend Jan van Bochoven said: "There are some organisations in the public sector who have come from a position where they have had spending stimulus in the last couple of years - so they have been asked to spend more money - to suddenly having to drastically cut spending.

"That is a big, big change and organisations often struggle with that."

Outsourcing, of course, is not risk-free. Some 300 people lost their jobs in Norwich last month when Connaught, which ran the housing maintenance programme for the City Council, fell into administration.

The local authority was left having to make alternative arrangements.

Unions say outsourcing results in job losses and poorer services but the problem for them is that councils no longer have the funds to do everything in-house.