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Government enquiry seeks evidence on outsourcing efficiency

20 Feb 2008 12:00 AM | Anonymous
News that a Government enquiry has issued a call for evidence on the efficacy and efficiency of outsourced services is a sign that Whitehall sees outsourcing both as a vital strategic weapon in the coming years, and also as a potential means of shooting itself in the foot when services are poorly managed.

The new enquiry, set up by business secretary John Hutton and headed by economist DeAnne Julius, is perhaps long overdue, given that the total value of government outsourcing is estimated at £40 billion a year and encompasses a growing range of public services being taken on by the private sector. It's likely that in the coming year outsourced services could represent over 20% of all government services spending.

The enquiry will report in June and is looking now at how the market can be made to work more effectively in terms of procurement models and barriers to entry. I think we should help.

Surely, however, this is a classic case of putting the cart before the horse: the real question is why some public-sector schemes are poorly conceived, specified and managed by the client.

The 451's Janice McGinnn reports this week on the ramifications for the National Programme for IT (NPfIT) now that Richard Granger has finally, as someone once said of Elvis, ‘left the building’ (leaving his work mobile behind in the press office, apparently).

This is the same Richard Granger who once famously lambasted "privacy fascists”, as he described them, for criticising his tenure at the head of the scheme – just a few months before a series of public-sector data privacy scandals revealed just how important data privacy is to successful government provision.

Granger's managerial style notwithstanding, one of the signature failures of the massively ambitious – and perhaps largely misguided – NHS programme that he headed has been its hard focus on IT, rather than service, and letting technology dictate and drive medical staff’s behaviour and working regimes.

This type of error unfortunately typified the ambitious and idealistic Blair regime – technology for technology’s sake; modernity for modernity’s sake. It was as though macho-budget technology spending somehow equated with powerful government; an old-fashioned arms race, in other words. But on the client side, no one outside the IT department wants anything to do with IT – unless there is a security breach, or a project is over budget and over schedule, at which point it is in the media spotlight.

Imagine the public support that has been squandered by all the mass-media public discussion about databases and technical specifications.

Gordon Brown, once paymaster of NPfIT, would do well to lose his Tory-crafted reputation for dithering by single-mindedly abandoning that focus and taking the programme back to the people who use it, and to its publicly stated aims (rather than its technical specifications).

When IT schemes go bad, whether they are in the private sector (like the IBM litigation discussed in my previous blog) or the public sector, the warning signs are almost always the same. If it’s for the people, but all about the technology, then it’s not going to work.

I suggest that this is what the enquiry should really be focusing on, otherwise it may (like some of the public schemes it investigates) be misconceived from the outset. The outsourcing industry as a whole, which employs hundreds of thousands of people within the UK alone, can only supply what it is invited to tender for.

I hope all the readers of sourcingfocus.com will put themselves forward to, in those immortal words, help the (industry's) police with their enquiries. Let's get involved and challenge the enquiry's assumptions. It will be better for our industry.

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