Comments by Francis Maude about how civil servants actually have no job but are too expensive to make redundant depict a major hurdle that the IT outsourcing industry.
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The government must overcome this scenario if it is to outsource more to cut costs.
The admission came when Maude was defending a decision to introduce emergency legislation to change the redundancy benefits of 500,000 civil servants.
Currently civil servants can get up to six and a half years pay when made redundant. Maude wants this to be cut to one year pay.
This would make it more affordable to replace in-house staff with those from outsourcing providers.
Both these changes will make wide-scale outsourcing possible.
In fact, according to Mark Lewis a lawyer at Berwin Leighton Paisner specialising in outsourcing, unless changes like this are made outsourcing will never be able to give the government the potential benefits it offers them.
He says, that unless platinum pension schemes, large redunandcy payouts and other public sector worker benefits widescale outsourcing in the poublic sector could be a non starter.
Here is a blog post I did in May about the advantages of outsourcing but the problems for its application in the public sector.