back to article Has outsourcing public-sector IT worked? The Institute for Government seems to think so, kinda

The outsourcing of British government IT projects has largely worked, according to a cornflake-spluttering report by the Institute for Government. In a review of outsourcing programmes across 11 sectors, the think tank rated back-office outsourcing (HR and IT) as green/amber, meaning they have largely saved money and led to …

  1. Adrian Harvey

    To be fair...

    To be fair you would have to compare with the success/failure rate before outsourcing which, given the record for large government IT projects probably gives the outsourcing camp a low bar to jump over.

    Icon - for the projects!

  2. TonyJ

    1. "The Institute for Government" sounds like something from The Mash

    2. I am sure that on one level, the statistics show a cost saving.. but, in no way is the reflective across the board. Every outsourcer will bid low, with a very specific statement of work and then make up the difference by ensuring even the slightest deviation is done under change control and therefore generates £

    3. No way, ever, outsourcing to the likes of Capita, HPE, Computacenter et al works out cheaper in the long term, so I'd be interested to see over how long a period of time these apparent savings appear to occur

    I could go on, but in essence I think it's fair to say I highly doubt that the claims would stand up to much scrutiny.

    1. Rameses Niblick the Third Kerplunk Kerplunk Whoops Where's My Thribble?

      1. "The Institute for Government" sounds like something from The Mash

      Didn't it used to be called the Department of Administrative Affairs?

  3. a pressbutton

    Summary != Summary on website

    Expecting to see some garbage from some alt-left|right wonktank, I was rather taken aback on reading the abstract.

    This is not quite what I gathered from your article. This is most of the summary of the summary and there is very little there for me to ridicule.


    It finds that outsourcing waste collection, cleaning, catering and maintenance services has delivered significant savings and benefits to citizens. Particularly in these areas, bringing services entirely back into government hands could lead to worse and more expensive services for the public.

    The report also shows that consecutive governments have overstated the benefits of outsourcing. Senior politicians regularly claim outsourcing can still deliver 20–30% savings but there is no evidence to support this.

    It highlights a series of high-profile contract failures – including security at the Olympics, welfare assessments, offender tagging and probation. These contracts have wasted millions of pounds, delivered poor services and undermined public trust. The outsourcing of probation failed on every measure, harming ex-offenders trying to rebuild their lives.

    Consecutive governments have outsourced services with no market of good suppliers or in pursuit of unrealistic cost savings – and without a reasonable expectation that companies could deliver efficiencies or improve the quality of services.

    The report recommends that the current government must strengthen its commercial skills and capabilities, makes ministers and officials more accountable to the public and improve the evidence base that informs outsourcing decisions.

    1. Rich 11 Silver badge

      Re: Summary != Summary on website

      It finds that outsourcing waste collection, cleaning, catering and maintenance services has delivered significant savings and benefits to citizens.

      Unless you are one of those citizens whose job was outsourced, in which case you were probably shunted out onto a lower wage (or later the minimum wage) and employed by a newly created company with fewer rights and protections. It took 25 years but even the Tories eventually realised this wasn't such a good thing for society, and started to argue in favour of employers paying a living wage (though one redefined to suit their purposes) rather than the minimum wage (which they'd also previously campaigned against).

      1. Chris Miller

        Re: Summary != Summary on website

        There are two ways in which minimum wages can work. If you set it at a level of around 60% of median earnings (as in the UK), then it has very little effect on either wages (because employers would need to pay that much to recruit anyone) or unemployment. Or you can set it a significantly higher level, in which case it increase wages for some low earners, but also increases unemployment as people are replaced by automation or jobs move to cheaper locales. Because if you increase the cost of something, people will buy less of it. Who knew?

  4. macjules Silver badge


    Has outsourcing public-sector IT worked? The Institute for Government seems to think so, kinda

    Mandy Rice-Davies Applies

  5. batfink Silver badge

    "The impact of outsourcing on quality is less clear"

    So, the comparison is solely on cost then?

    You would think that when doing a comparison on whether it provides value for money, the quality of the outsourced services would have to be a major factor.

    Lower cost, lower quality? Who'da thunk it...?

  6. hplasm

    Choice isn't as obvious as it seems...

    In house or Outhouse?

    outhouse - q.v. cludgy, dunny.

  7. Anonymous Coward
    Anonymous Coward

    The reason for outsourcing is simple....

    ... it means the service provider is held accountable when the service offering fails spectacularly and not the sitting Government - no matter how flawed the idea was at the outset (Universal Credit anyone?). IT suppliers are paid-for blame-monkeys, nothing more, so in that respect.... worth every penny to the Government that pays for them. Anonymous, as I have worked both sides of this relationship.

  8. Only me!


    Well, I have no idea how that's worked out.

    I have worked in the public sector for years and all of the out sourced IT is both useless and expensive.....Moving a PC £950.....Quote for a quote £75K (Yep, that's just to get the quote!!! The work in itself only cost £60K....once we worked around the IT Supplier)....BT, Serco, al....they are all the same beast.

    1. Say you are 100% "work" committed. (So whatever you are asking for will cost)

    2. Never say yes in ANY meeting

    3. Every time some one is a sales opportunity.

    The "original" contract to take over is just getting the foot in the door....once you are in, they screw the client to the floor!!!!

    Outsourcing does/can work...but you have to know what you are outsourcing, why you are doing it and have all the angles covered....that is the bit that gov fails on!

  9. Doctor Syntax Silver badge

    "then Cabinet Office Minister Francis Maude "

    Who are you and what have you done with el Reg?

    Mad Frankie!!

  10. amanfromMars 1 Silver badge

    The Bare Bones of a Calamitous Cabinet Conspiracy

    Not least because then Cabinet Office Minister Francis Maude waged a war against the IT supplier “oligopoly”.

    Companies including Fujitsu, IBM, CSC and HPE Enterprise Servics felt the pinch of that change in UK government strategy.

    Surprisingly, the report does not mention the creation of the Government Digital Service, which itself has had a mixture of successes and failures.

    Surely that is the Cabinet Office, and by virtue of Parliamentary acceptance, political partying support for the purloining of public funds to compete against private enterprise.

    Is such blatant forfeiture and spending for such speculative business adventuring, criminal, or perfectly acceptable and legal?

    The latter would make for a right wicked wild west and proxy pirate type environment ..... and there aint no leading rules and regulations there ..... just a little bit/a lot of what you fancy does you good and keeps you ahead of the baying mobs?

  11. Organisational Terrorist

    What about the multiple outsourcing failures in Local Government?

    Here in Somerset, a Big Bang outsource of Back Office services to IBM in a joint venture with IBM called Southwest One went horribly wrong.

    Instead of saving Somerset County Council £182m over 10 years it cost £59m+ more than savings after 9 years.

    Similar failures have occurred in every largesacle back office outsource I can think of: Suffolk, Birmingham, Liverpool, Cornwall etc

  12. Adelio Silver badge


    Well i have never been convinced of Outsourcing. Especially for IT but it probably stands for other cases.

    You have a team of poeple supporting the IT systems internally, they may not be great but usually they have a shed load of erxperience and they are a fixed cost.

    If you Outsource you loose all (Or most) of the experience internally, meaning that you are totally at the mercy of the outsorucer. If IBM et all arte to be used as an example then probably after 3 months most of the "top" people in the constract will have moved on to the next Cluster f*** and you are left with mainly trainees and inexperienced staff.

    As said by other people. Any changes, ANY CHANGES will be expensive.

  13. Anonymous Coward
    Anonymous Coward

    working for one of the outsourcing firms ....

    ... hence an Anonymous Coward.

    I've never bought in to the whole 'outsourcing saves cost' thing.

    As previous comments have pointed out: You lose in-house experience and expertise; Once they have your crown jewels in the palm of their hand, the outsourcer can then charge exorbitant 'incremental revenue' for any additions or changes; They'll usually shift your support to a 'low wage' economy and use junior staff who will jump ship for more money as soon as they half-know what they're doing; It shouldn't be all about cost saving - there's a reason why the phrase "cheap and nasty" exists.

    But on top of that, if you run a service in-house, and it costs £x, you don't have to make a profit on that. You can run it as a cost centre. If you outsource, the outsourcer is in the business of turning a profit - unfortunately, often more than being in the business of outsourcing. How do you expect someone else to run the same service to the same standards to the same support model for less money, and make a profit on it?

  14. Anonymous Coward
    Anonymous Coward

    > The outsourcing of government IT projects has largely worked

    Which is presumably why we , as a Government body , are busy bringing as much as we can back in-house.

  15. RancidRodent


    You'd have to be pretty crap to be outperformed by any form of council/government worker - even the dross that do the needful are better than the average public trot.

  16. gnarlymarley

    Outsourcing adds the cost of the other business' overhead to the employee's cost. Therefore, outsourcing will be more expensive that inhouse. The only way to bring that cost down is to outsource to an area that has a lower cost of living.

  17. Anonymous Coward
    Anonymous Coward

    TUPE or not TUPE

    that is surely the question. 90% of the savings of any outsourcing are rpredicated on eother lowering the headcount or lowering the wage bill... or both. They can take over the existinf staff and then when drained of their knowledge and usefulness they can then be shuffled off by nefarious methods and the six month trainess takes over.

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