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Story URL: http://www.silicon.com/publicsector/0,3800010403,39258100,00.htm

Gov't to ramp up IT outsourcing?
Let's hope not, say unions

By Nick Heath

Published: Friday 11 July 2008

A government pledge to outsource more IT contracts ignores a history of blown budgets and missed deadlines, unions claim.

Secretary of State for Business John Hutton promised a "long-term commitment to open up public service markets" that will make it easier for the private sector to win IT contracts.

The pledge comes on the back of the Review of Public Services Industry by economist Dr DeAnne Julius.

Read more on outsourcing… in silicon.com's dedicated outsourcing channel

The review found that outsourced public services' contribution to the UK economy has grown 130 per cent since 1995, to £79bn, and that the UK leads the way in the public sector IT services market.

The review quotes estimates that £12.4bn is spent on IT by the public sector and that the IT-heavy business process outsourcing market will grow to £7.5bn by 2012.

But the Public and Commercial Services Union (PCS) claims the private sector commitment ignores a catalogue of troubled partnerships in the past.

A spokesman for the PCS told silicon.com: "Our concerns about the private sector's ability to run government IT contracts mirrors our wider concerns, in that what is best for the public all too easily becomes subservient to what is best for business.

"Furthermore, the private sector has shown its inability to run these services effectively and efficiently."

Hutton said in a statement: "It is clear that private and third sector organisations play a valuable part in delivering modern public services and our substantial investment over the past 10 years has paid off.

"This is now a thriving sector that employs over one million people and makes a major contribution to the UK economy. We will now come forward with measures to support the future development of this sector.

"What matters to the public is not who provides but how well a service is provided."

Nick Kalisperas, director for delivery at IT industry trade body Intellect, said: "From out perspective this is good news but ultimately the key to getting the best out of the private sector comes from engaging with them at the earlier opportunity."

The government has also pledged to make the public sector bidding process fairer and simpler and promote public sector contracts at home and abroad.