Capability versus efficiency: contracting out park and road services in Norway

Abstract

Purpose – The purpose of this paper is to provide insights into the extent of, rationales for and outcomes of contracting out in the local road and park sectors in Norway. For understanding the use of contracting out in local governments, it highlights the relevance of the capability perspective in organisational literature as an alternative to the standard efficiency perspective. Design/methodology/approach – The paper draws on four expert interviews and survey data gathered from park and road managers in Norwegian municipalities in 2015. Findings – The study suggests that Norwegian municipalities primarily contract out park and road maintenance services when they do not have the capability to perform these services themselves. Cost concerns are also highlighted but of less importance. Moreover, lack of competition renders the use of contracting out as a potentially costly and less satisfying arrangement for organising service delivery. Research limitations/implications – While the scope is limited to one country, Norway, future research may benefit from the theoretical perspectives, which have been used. Practical implications – Policy guidelines should support a flexible use of various arrangements for service provision. Originality/value – The dominating view among proponents of marketisation in the public sector suggests that contracting out to private contractors is undertaken to enhance economic efficiency compared to keeping service production in-house. This study suggests that this is not always the case – even in “most likely” sectors such as park and road maintenance.

A review of the outcomes from contracting out urban green space maintenance: What we know, don’t know and should know

“…However, further decreases in spending levels from additional contracting beyond 25 percent of all municipal services were found to be insignificant. The studies of, respectively, Norwegian and Swedish municipalities by Leiren et al (2016) and Bretzer et al (2016) also indicated that competition varied according to geography and administrative structures. Both country contexts are characterized by many very small municipalities scattered over vast geographical areas.…”

“…Clark (1997) found that 71 percent of responding UK local authorities reported that 'better value for tax payers' was achieved from contacting out versus 25 percent reporting that this was not the case. The study by Leiren et al (2016) found highly negative economic outcomes in terms of substantial cost increases for Norwegian municipalities from their latest use of competitive tendering, while the study by Bretzer et al (2016) found that the likelihood of no cost change in competitive tendering was substantially higher for Swedish municipalities than the chance for cost savings.…”

“…This is perhaps most evident in the policies on compulsory competitive tendering in the UK which provided a tight regulation of the use of contracting out as a clear cost-reducing mechanism (Dempsey et al, 2016). A special case, which also illuminates the importance of taking objectives into account, is the study of contracting out in Norwegian municipalities by Leiren et al (2016). The study found that the overriding reason for private service provision was a lack of in-house capacity rather than cost concerns.…”

“…limited scope for alignment of resource use with broader community or user preferences. Leiren et al (2016) provided a comparison of satisfaction levels with performance of public and private provision and found that satisfaction levels with public provision compared to private provision were significantly higher for three out of six measures. However, the difference may be a result of differences in the type of maintenance services, as the Norwegian municipalities mostly used private contractors for provision of services they could not provide themselves.…”

Measuring perception about sustainability of building materials in Kosovo

“…Studies addressing in-house and outsourcing of other public services, such as Fet et al (2011) and Leiren et al (2016), have been excluded from this article, as these studies contribute to a more general understanding of outsourcing in the public sector. These articles address services which are traditionally organised under other sections than the real estate and FM departments of local authorities.…”