By silicon.com, 23 January 2006 16:55
There are plenty of good reasons why the government would want to offshore some IT work.
Most private sector outsourcing deals will assume some level of offshore development now in order to keep costs down. The big banks in particular have decided they can get good value, high quality development done offshore.
Lower costs for government should also mean lower taxes for the public, which might make it an attractive option. After all, should the government be subsidising skills which are available cheaper elsewhere? Perhaps some of the money saved could be put towards retraining workers with skills harder to offshore.
And if the banks - who arguably worry more about security than any other business - are happy about the levels of security offered offshore, then why should the government worry? After all, it can hardly be worse than the levels of data safety we have already.
There are, of course, also some excellent reasons why the government should steer clear of offshore development.
On a purely political level it is pretty much impossible to justify deals that involve cutting jobs in the UK and moving them abroad.
Like it or not, the government has to take a wider view than a private business. Offshoring a few jobs might save money today, only for it to be paid out tomorrow to unemployed workers on the dole. And you can bet any savings would quickly disappear into the black hole of government accounting, never to appear again as tax cuts.
Also, many people would feel uncomfortable about having their personal information sent to another country. What if relations between the UK and the offshore country hit a rocky patch? We'd feely extremely vulnerable if companies in that country had all of our tax records.
This debate resurfaced today as a leaked document revealed the Department for Work and Pensions (DWP) may consider offshoring IT work. When news of the leak was put to the DWP, it responded as if it had been caught in a sting by the Fake Sheik and bleated that it had no plans to offshore.
And then it admitted that some of its suppliers might use sub-contractors that are based abroad.
Here we have the big problem. Government use of offshoring is an important issue on so many levels - the future of skills and the IT industry, government spending and even national security all could be impacted by the decisions made.
What we need is an open debate on these issues, not for it to be swept under the carpet by a government worried about how the tabloids or unions will respond.
But at the moment decisions about whether jobs are sent out of the company are being made by businessmen - those executives running the companies who've won government contracts - not by our elected representatives. The responsibility for making these sorts of decisions is one thing we should not let the government outsource.
Comments
There are 8 comments. Join the discussion
1. Mark Kobayashi-Hillary
It is a complex question. Should the government not be allowed to choose the best value/quality combination from a provider because part of the service delivery is managed offshore, or should there be a completely free market in services - allowing the best possible use of tax payers money? Let's not kid ourself that it is not happening already - in fact it is openly stated on some NHS contracts, Transport for London, etc... If offshoring is used in a government contract for reasons of cost alone then it is likely to remain controversial, but we need to adopt a more mature attitude and stop thinking that all expertise in all matters can be locally delivered in a reasonable timeframe.
2. Charles Smith
Offshoring - savings on this year's budget at the expense of investment in the skills base of your own country.
Offshoring - Service importation, paid for by some other UK organisation's profit on exports.
Offshoring - Tax and pension contribution avoidance.
Offshoring - giving your competitor your business and paying them to take away your skilled staff.
3. David Chassels
The challenge for government is they need to become an "intelligent buyer" in IT - Offshoring IT development is continuing the "dumb" approach - any way using a Task Orientated Application "TOA" no need for IT development just need to know what your people need to achieve in their daily work - now that can't be too difficult and certainly can not be put offshore.
4. Andrew Webster
Contracting to offshore companies is great for short term profits, but what happens when you've made all your customers redundant?
Blair and his cronies only care about the short term economic benefit to this country not the long term socioeconomic problems it will bring to the UK
IR35, Imigration, Schools, Public Transport, Health. The list of new Labours failures now far outways any improvment they could have made
5. Steve Lyons
I wish the government would stop giving Local Government such conflicting goals. On the one hand we are supposed to be trying to get more and more efficient and operate like banks complete with outsourcing or public/private partnerships. Then they turn around and say we have a social responsibility to help them bring long term unemployed back into work and to provide employment for people with learning and other needs. I agree both these things are important but it is really hard to try and do both. They do the same thing with the Data Protection Act on one side and datasharing within public sector. Oh how I wish for clear goals and objectives...
6. Uwem
A rather difficult one, but one that should not be treated in with the government's usual shoddy approach.
It does raise question about what “Central Governance" is about if its responsibilities are off shored? Maybe next we can offshore the parliament; the local authorities etc and send everyone who has been gainfully employed and providing valuable services on the dole. I wander what savings there would be on keeping all civil servants on the dole as well as the off shore contract costs! Better still, why not offshore the pensions management and administration?
7. David Sparkes
It's completely ludicrous to suggest that money leaving the economy to foreign shores is somehow a saving on money that's kept within the national economy.
Yes, in one column the numbers are reduced, but other columns, such as taxable income and NI contributions, are also reduced; if you don't pay them to work for the government you'll have to pay for them to seek jobs and you won't be receiving tax from them.
Yet again it's an example of targets addressing the wrong problem.
8. Elizabeth Duncan
I don't know who would forbid government to offshore, but there are certainly reasons for empowering our politicians with the information on which to base recommendations to industry on alternatives. Facts - there are thousands of people in this country willing and able to work from home; communications technology can enable people to work from anywhere, not just in offices; there are remote working organisations able to mobilise and manage remote workers. For a very small comparative investment, government could introduce incentive schemes to businesses using remote workers in this country, employed or self-employed, solving not only general unemployment, but a range of other issues as well, such as transport, carbon emissions, community regeneration, vandalism and many more. It is not necessary to go offshore to find qualified and skilled workers - they are in every village and town, but are currently apparently invisible.