Councils are increasingly getting the blame for careless work when it is not their fault, claimed Alarm, the National Forum for Risk Managers in the Public Sector.
It said contractors working on behalf of councils who deliver sub-standard work are being spared the blame, leaving councils to deal with the complaint.
Alarm said damage to council's reputations caused by contractors was a growing issue for public sector risk managers.
Increased pressures and demands on public sector organisations for better services on reduced funding has led to the increased use of outsourcing for service delivery.
Alarm chairman Bob Cope said: "Poor contractor performance could seriously damage a council's reputation and such cases are increasingly becoming high profile.
"Whilst many councils are becoming far more innovative in drawing up strategies for how to improve service provision, and outsourcing features highly in many such cases, it is vital that they actively manage partnership and contractor arrangements, and risk management must be central to their operation.
"When things are going well the public heap praise on our local authorities but if something goes wrong which is effectively out of their hands, it is them who get the blame."
Cope went on to warn that a full risk assessment needed to be carried out on any outsourced contract.
