Is the government being charged 40% too much for outsourcing?

I always see best practice guides for IT buyers but what do you think a public sector bad practice IT guide would include.

Tony Collins reported the findings of a Compass Management Consulting benchmark exercise on government spending on outsourcing.

It reveals that the government is paying £6bn too much every year. This according to Compass is 40% over the market rate. I blogged about this very research last month.

According to Matt, one of Inside Outsourcing’s regular contributors the way the government pay contractors could be a large part of the reason.  Commenting on a recent blog post he said: ” I have worked for public sector organisations that typically pay 30% above the market rate to hire contract staff via consultancies, with the consultancies pocketing massively inflated margins and often importing cheap ICTs to do the work (poorly), while the public sector client has even been barred by the government’s own regulations from seeking cheaper alternative suppliers or recruiting from the local market. Madness.”

What do you think?

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Yes, it can be 'madness' indeed as the way people works change faster in a blink of an eye - and laws can barely keep up. We, as a global marketplace, need to redefine fair business, outsourcing, and employment practices that will work for all. Then again, there is the issue of greed vs. ethical outsourcing. That's why we still hear a lot of horror stories in those sweatshops or human slavery/trafficking. One thing's for sure, work will be mobile and people don't have to be confined in the traditional office setting just to do their own share. Just my two cents.