Argument over UK outsourcing spending erupts

The Huffington Post is carrying what looks like a well-researched piece on the cost of outsourcing contracts into which the UK government entered in order to push reforms through for Universal Credit, the latest iteration of the country’s welfare system.

The implementation itself, meanwhile, has been vilified at almost every turn as poorly handled and subject to bad oversight.

Two things are central to understanding this current row. First it’s important to see that although the figure, £1.4bn, appears alarming, it refers to money spent or agreed from 2012. So realistically it’s £200m-£250m per annum, which is substantial but less of a headline-grabber. This also needs to be seen in context; nobody is coming out and saying “yes but to keep it in house would have cost £4bn” or something but some sort of estimate on the corresponding insourced spend would have been useful.

Second, the government’s response has been to say this isn’t a coherent single spend but a lot of individual and unrelated contracts. This may well be a fair point; where do you draw the line when discussing this expenditure? IT systems for the changeover, fine, those are direct costs – but the catering, cleaning and facilities management staff who are making this happen, are we now saying they are not part of the spend, or that they are? Without some sort of definitive ruling about what parts of the spend are going into the Universal Credit pot and which bits are ancillary overall support, it’s difficult to make the figure mean anything.

Still, nice headline…

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