Anxiety over risk is prompting government to outsource more than just contracts, but the policy process itself
by James Woudhuysen
20 October 2006
The news on outsourcing is bad, really bad. Accenture has bottled out of £2 billion of contracts to manage NHS IT. Gordon Brown, outsourcing's most assiduous backer (PFI, Bank of England's Monetary Policy Committee), has outdone even himself. In floating the idea of an "independent" board controlling the NHS, he has extended outsourcing not just to the largest employer in the EU, but also to government policy itself.
FMs need to know that the thrills and spills of an outsourcing contract are nought compared to the dangers of outsourcing policy direction. The latter is, first, bad for democracy: second, it is bad for management.
For proof, look no further than... NHS IT. But let's get the origins of the cock-ups right. It starts from the market economics of private sector greed and corruption, when it should start from the New Labour politics of public sector fear and irresponsibility.
The litany has it that private sector specialists in outsourcing recruit ex-public sector bigwigs to help them win high profit, low wage deals at the taxpayer's expense.
But wait. What the litany misses is how the confused chains of command that surround public sector outsourcing are the logical outcome of fears: fears that bad medicine or bad medical IT will lead to political scandal and mass litigation. Fear of risk makes New Labour directorates outsource not just operations, but political ambition itself.
In Public services and ICT: where next for transformational government?, a recent report for Adobe Systems Europe, Work Foundation researchers Alexandra Jones and Laura Williams take a very different view from mine. They list many things that government IT projects lack in terms of leadership; skills and resources; and implementation. Good, neutral, technocratic stuff.
But why does the Work Foundation also have stiff words for 'scope creep' in public sector IT projects? Because it seriously believes that "government is too eager to take risks" over IT. The report contains 56 mentions of 'risk' but just two of 'innovation'. Indeed, the Financial Times quoted one of the authors as saying that the public sector "should not be about cutting-edge innovation".
I call this approach irresponsible, because it wants to slow down innovation, and subject leaders of public-private partnerships to yet more regulation. They should, it seems, "be required to publish ICT accounts" covering - you guessed - "the risk of poor performance in coming years".
While outsourcing companies and public sector managers must publish accounts, Her Majesty's Government refuses to be held to account. It outsources not so much costs or staff, as the very process of making promises and delivering upon them. No matter how grateful outsourcing specialists are for the business they are given, they should say that the outsourcing of policy is a step too far.
James Woudhuysen is professor of forecasting and innovation at De Montford University