India's Economic Times (ET) has reported that local outsourcing giants, such as TCS, Infosys and Wipro, are preparing to tender for an estimated '$2-3 billion' of new Whitehall outsourcing deals as the UK government struggles to get troubled technology projects back on track.

The ET reports that as well as the usual suspects – the NHS Programme for IT, for example – HMRC will also be outsourcing more work as the department plans to make it mandatory for medium to large enterprises to file tax information online by 2011.

If so, then TCS has picked a challenging time to lay off over 100 of its 4,000-odd UK staff as it optimises UK operations. Sources say that the company has made most of its UK marketing team redundant, plus a number of consultants.

Many people who have lived through previous recessions will be familiar with a particular approach to cost-cutting: the marketing team is first to go, which undermines opportunities for new business, closely followed by anyone in the heart of the organisation whose skills come at a price.

Occasionally, the latter means slashing experience and wise heads out of the enterprise in an effort to retain low-cost bums on seats. For some reason, this keeps shareholders happy.

While I'm sure this does not apply to TCS, what such an approach sometimes creates is a top-heavy organisation that doesn't value experience, can't attract new clients and whose lower-cost employees are often demotivated and lacking in immediate leadership.

That said, it's the route most companies choose in a downturn. Few ask what shape they might be in when business picks up. (Or as a colleague at a doomed publishing company once said, "He who swerves first loses.")

Also slashing local onsite operational costs, claim various reports, are Wipro and Infosys.

A homegrown company, meanwhile, joins the queue of providers scenting new business at Whitehall.

Capita last year saw revenues rise by nearly 18% to £2.44 billion as it increased its share of the local outsourcing market to over 25%. The company has already inked contracts worth over £600 million this year and has a potential deal pipeline of over £3 billion.

Capita chief executive Paul Pindar believes that the deterioration in UK public finances will drive new government commissions. “Over the next two or three years we are going to see a significant increase in opportunities coming from central government,” he said recently.

So, outsourcers are lining up to benefit from Whitehall's immediate challenges, and claiming this is because the government lacks consultancy expertise.

But why is no one asking why so many government programmes are running disastrously over budget and over-schedule? As the Public Accounts Committee has heard many times already, it is because there is a surfeit of consultants awash in government cash, not a lack of them, but little expertise in Whitehall in how to manage the everyday terms of these escalating deals.