Will we ever kill once and for all the idea that the private sector can do anything the public sector can do, but do it better and cheaper?
We’re in a strange spiral at the moment where the government is dogmatically attempting to contract out to companies as many public services as it can before the 2015 general election, while at the same time we get more and more stories about private sector outsourcing failures affecting government services.
It’s not just in IT – look at the fiasco over the 111 non-emergency number for the NHS, where a perfectly good NHS Direct service has been replaced by a poor, patchy, and potentially downright dangerous service.
Look at the scandal of G4S and Serco charging for tagging non-existent criminals. And look back to last year and G4S again, and its failure to fulfil the contract to provide security staff for the London Olympics.
But the repeated inability of the private sector to adequately service the public sector has been felt most keenly in IT for many years – the long litany of IT failures, culminating in the biggest one of all, the NHS National Programme for IT, where the inability of CSC in particular to deliver any sort of even barely usable service led to legal recriminations and huge losses for the supplier, not to mention the billions of pounds of taxpayers’ money that was wasted.
Look at Southwest One, the Somerset council outsourcing – another one that descended into possible legal action and finger-pointing as the private sector outsourcer failed to deliver the promised benefits.
The public sector is not perfect, of course. Many public institutions are over-bureaucratic, slow to respond, and frankly a pain to deal with. But that’s not due to a lack of competition, nor to the lack of a market to drive improvements – it’s a simple lack of leadership.
The current government – and in particular, its Tory majority in the coalition – use language designed to convey the impression that the public sector simply cannot provide the services needed in a time of austerity without handing those services to faster, better, cheaper outsourcing companies.
It just isn’t true.
A Tory minister was on TV recently, saying how the NHS had to make “compassion and care” its priority – as if these vital values had been somehow extinguished from the health service. There have been NHS scandals, such as Mid-Staffs – but again, the problem was poor leadership, not some intrinsic public sector failing.
Of course, there are also some very successful outsourcing initiatives – and there will always be situations where outsourcing certain public services is the best option. But it’s the knee-jerk assumption of “private sector good – public sector bad” that needs to end.
IT is, for once, showing the way. The biggest mistake the civil service made in its many IT outsourcing megadeals signed under the Labour government was losing skills in-house – decision-making was effectively outsourced along with the physical delivery of IT services.
Now, there is a welcome focus on getting the best IT skills back into Whitehall – the Government Digital Service (GDS) has recruited some of the best web developers in the country working on its “digital by default” strategy.
HM Revenue & Customs has announced its new CIO – well, strictly speaking, chief digital and information officer – is moving from Vodafone to work for the public sector. It’s a blow for the respected acting CIO Mark Hall, but the principle is good.
One of the lessons learned by so many of the early adopters of outsourcing was that staff working for an outsourcer will, ultimately, be answerable to the profits of that company over and above the needs of the client to which they provide services. A private sector outsourcer will look for every opportunity to get new sources of revenue from a contract. A public sector employee – one with good leadership at least – is more likely to be focused on the services they provide.
That is a huge and fundamental difference.
GDS has shown, so far at least, that good leadership can deliver public services that are better quality and lower cost, without needing some magical private sector fairy dust sprinkled over it. They still use private sector suppliers – but on their own terms, to provide specific services where the company selected has the specific skills needed to complement those of the civil servants.
Politicians like to think they are showing great leadership by bringing in the private sector to cure the ills – real or perceived – of the public sector. But they only demonstrate their lack of understanding of what makes good leadership.
Leadership and skilled staff are the keys to successful, cost-effective public services. There are plenty of great public sector leaders that bear this out. If the government wants to show leadership, it needs better leaders, not better outsourcers.