Outsourcing or the "contracting out" of core services has reduced procurement costs and improved public service delivery in a number of countries.21 The gains are greatest in the labour-intensive industries where opportunity exists to reduce overstaffing, introduce new technology and improve productivity.
Evidence from case studies completed for the outsourcing of waste management contracts in east European countries points to the following benefits from outsourcing arrangements:
• Reduced procurement costs and more efficient service delivery
• New technology is improving productivity at the enterprise level
• Innovation is expanding services to include recycling and hazardous waste management
• Ensuring compliance with new environmental and health standards
• Third party commercial contracts subsidise state service payments
• Enterprises are self-funding with lifecycle-costed re-equipment and maintenance programs
• Reduction in industrial pollution and the contamination of drinking water.22
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21 Hodge 2000; European Commission 2004.
22 European Commission 2004, pp. 21-23; 61-65, 80-82.