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Backgrounder: Insourcing

Click here for PDF of full backgrounder

Cities and states across the country are finding out that the “promises” of privatization often fail to materialize once the contract is signed. When cost savings aren’t realized or service quality declines, many governmental entities are turning to reverse privatization, or “insourcing,” to bring contracted functions back in-house. Insourcing enables cities and states to reassert public control over public services and assets. Recent research and the experience of numerous local and state governments show that by bringing critical functions back into the public realm, we can improve the quality of our public services, while achieving cost-savings to make the best use of taxpayer dollars.

This backgrounder brief provides examples of cases where, when cost savings aren’t realized or service quality declines, many governmental entities are turning to reverse privatization, or “insourcing,” to bring contracted functions back in-house. It explains the benefits of insourcing for the general public interest and addresses examples from multiple levels of government across a wide array of sectors including corrections, water, IT services, and more. It includes an appendix with more examples.