Why are local authorities reluctant to externalise (and do they have good reason)?

In vogue with the international currents of public management, the United Kingdom's New Labour government sees the outsourcing, or externalisation, of public service delivery as a key instrument of performance improvement. Evidence suggests, however, that a significant proportion of local authorities are reluctant to externalise. On the basis of fifty interviews in six case-study authorities, the author identifies five reasons for a reluctance to externalise. He further considers the degree of theoretical support for this reluctance, concluding that gaps in our knowledge -- critical to 'make or buy' decisions -- make it impossible to determine whether a reluctance to externalise is well founded or not.