Is Jeremy Hunt right about Labour’s £38.5bn black hole?


The next biggest commitment is insourcing, which the Conservatives say will cost £6.5bn over four years.

The idea of insourcing is to stop public services being provided by private companies and give them back to the state to carry out.

There is no question that Labour are enthusiastic about insourcing, but they have not given details of where and how quickly it would happen, so a lot of assumptions are needed to come up with this costing.

The calculation assumes that outsourced services are 7.5% more efficient than insourced ones, based on a report from the Institute for Government, external.

But what the report actually says is that while some outsourcing has led to greater efficiency, other attempts have resulted in “significant overspend, while a string of failures has damaged public trust”.

The 7.5% figure is only mentioned once in the report, as the lower end of the savings from outsourcing cleaning services.

The government dossier, external actually warns about the use of the 7.5%: “We have low confidence in this because the difference between the cost of outsourcing and in-house delivery is highly circumstance specific.”

Labour have criticised the involvement of Tory special advisers in reaching these costings because they are likely to be more political than other civil servants.


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