Why suppliers should not be outsourcing scapegoats
Don't draw the wrong conclusions from the NHS
Published 19:03, 25 May 11
Of all the rumour and, in some cases, intrigue surrounding outsourcing in the public sector, one of the most interesting has been the recent saga surrounding the provision of services for the NHS, which has come under fire from no lesser authority than the Prime Minister.
David Cameron went as far as to tell parliament that he is ‘very concerned’ at the progress made by a major outsourcing supplier in its efforts to implement multi-million pound IT projects for the NHS, and added that he was considering ‘all available options under the current contract including the option of terminating some or indeed all of the contract’.
It’s clear that the Prime Minister is already facing some stiff opposition to his plans for reform in the NHS, under which groups of GPs would be handed control of around £80bn worth of NHS spending, with a remit to commission treatment and services from ‘any willing provider’ - including private companies.
We’ve already seen Deputy Prime Minister Nick Clegg vowing to veto the legislation, which is proving unpopular amongst MPs and activists alike. However, it’s well worth asking whether, by publicly criticising a leading outsourcing supplier, Mr Cameron is setting them as the scapegoat for his unpopular policies, and outsourcing in general?
Let’s look at this another way. Is it a coincidence that in the last week, we’ve seen outsourcing hit the headlines, following suggestions that wholesale outsourcing of public services could be a ‘political risk’?
By criticising a major supplier of outsourcing so publicly, is the Prime Minister implying that they are, in fact, the root cause of the problem? After all, the proposed NHS reforms, and in particular, the emphasis they place on using a number of different suppliers - and not just those from the private sector - hold strong echoes of the sentiments expressed in the leaked memo between Francis Maude and business chiefs, in which it was suggested that charities and social enterprises had a role to play in the provision of public services.
It’s clear that the supplier in question has owned up to a number of the inefficiencies that Mr Cameron refers to, and have even taken the step of revealing sweeping changes to the way it rolls out services, including a new deployment method to roll out patient administration systems into smaller deployments of more standard and modular components and a willingness to involve doctors at an earlier stage in IT development and implementation.
Even so, it seems to me that one supplier cannot be blamed entirely for the existing inefficiencies in the NHS - and neither should any poor performance from that supplier be held up as a reason not to outsource additional public services.
When outsourcing contracts struggle, it can be for a number of reasons, and not only because the supplier has not performed to expectations. For instance, in this case, has the contract been managed effectively from the government’s end? Were clear objectives put in place at the start of the contract? How were changes handled? For that matter, did the government work to find a supplier with the right level of cultural understanding to understand the way the NHS operated? Were they cheapest supplier?
All these are questions that need addressing before any outsourcing contract is entered into - and if they weren’t, then perhaps the government should be held accountable? The NOA is always willing to help, perhaps our lifecycle model or sourcing knowledge could be of assistance?
Whether in this case it’s a government or supplier problem, it’s clear that outsourcing has a lot more to offer than many in the government would like to admit - for whatever reason - at the moment.
Just as it’s true that one swallow does not make a summer, one project with poor performance does not necessarily mean that all outsourcing contracts are destined for failure - and the government would do well to remember that.