There's nothing for government IT outsourcing to learn from Carillion that we don't already know

The demise of construction and services giant Carillion has brought fresh scrutiny of outsourcing in government. Frankly, you could find some event almost every year that brings fresh scrutiny of outsourcing in government – from the IT disasters documented by Computer Weekly over the years, to failures in prisons and even security for the 2012 Olympics.

Because of those historic IT failures, IT outsourcing has been examined, prodded and analysed many times, by MPs, the National Audit Office (NAO), and independent experts. This week, there have been plenty of tech commentators looking for “lessons from Carillion”, but the reality is that Carillion only demonstrates the issues that we’ve seen in government IT for a long time, and the solutions that have been proposed yet consistently ignored.

After 2010, when then Cabinet Office minister Francis Maude took aim at the oligopoly of big IT outsourcers, there was a lot of progress made in trying to apply some of those solutions. We’re nearly eight years into a process of disaggregating IT contracts to make them more manageable, and to reduce the sort of exposure to a single point of failure that’s affecting Carillion’s projects.

However, even after eight years, progress has still been patchy. Many of those mega-deals are still lumbering along, and because of the distraction of Brexit, many are being extended because it’s easier than trying to break them up.

We’ve seen a rise in the use of SME tech companies, through initiatives like G-Cloud, but according to the NAO, by 2016 94% of government IT spending still went to big suppliers – down just 1% since 2012-13.

Not much has really changed. We may not have so many huge deals with a single prime contractor, but the sub-contractors involved are still delivering the same services, and they are mostly the same old large system integrators. They still have as much of the pie, it’s just sliced a little differently.

In some parts of government, they are getting IT outsourcing right – using it to supplement and complement the skills and resources available in-house, rather than to replace them. But those examples are mostly sporadic.

Where IT outsourcing has the greatest parallel to Carillion is around transparency and accountability. There have been numerous calls for open-book accounting on contracts, for those contracts to be publicly available for independent scrutiny, and for suppliers of public services to be covered by Freedom of Information laws for their outsourcing deals. Despite government commitments to open contracting, none of this has happened.

When an IT contract goes wrong, it’s rare that the supplier gets punished. The same old faces always turn up the next time a deal is awarded. Blame gets apportioned, but nobody is held accountable.

Eight years after Maude started the process, the Cabinet Office is still telling us it will take four years to exit the remaining IT outsourcing deals, and warning of the complexity of doing so – advice that should have been given in 2010.

Let’s not forget that there are times when IT outsourcing works for government – but if there is one thing to be learned from Carillion, it’s that the knee-jerk response to outsource should come to an end. It’s one of the tools in the digital kitbag, but it should never again be the default option.

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Good article save for the comment blaming the slow progress in unscrambling PFI-based outsourcing on BREXIT. The bigger problem is the time it takes for Government to rebuild its internal skills base. London-based GDS was messy distraction. Meanwhile HMRC and DWP have made real progress north of Birmingham where public sector pay scales, including for IT, are more than competitive. 
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