Leader: Be honest about offshoring

Outsourcing work to offshore locations such as China, India, South Africa or Vietnam is no big deal for UK businesses these days.

Many companies are happy to take advantage of the lower costs and big labour pool that offshoring can offer, and suppliers see it as a good way of trimming their prices too.

And so, in a surprisingly short time, offshoring has become a standard business tool.

But not for the government. It has signed conspicuously few offshoring deals - especially, as we heard earlier this week, to India.

This can't be down to a generalised fear of outsourcing as the majority of public sector technology services are delivered by big IT companies.

So what makes it politically more acceptable to outsource to one company but not offshore to another? Inevitably it's down to where the jobs end up - no government wants to be seen to be creating jobs in another country at the expense of its own citizens.

Also, governments have to be accountable to the whole country - and not just to accountants. So the financial savings made have to be balanced against the wider impact on society.

The danger is that this means the government could end up effectively subsidising jobs in the UK that would otherwise be moved elsewhere in world. Should the taxpayer really be paying extra for IT because the government doesn't want to be seen in a bad light?

Of course, what happens at the moment is that the government outsources to an onshore company and then that supplier sub-contracts the work, and some of it inevitably goes offshore.

So really we're talking political sleight-of-hand.

What we need is more transparency and honesty - and a bigger debate about the role of offshoring, especially for government contracts - if we are to better address the IT skills issue.