Here in the UK, a lot of activities that were traditionally the responsibility of the state (health, education, policing) are increasingly being outsourced. Conventional wisdom is that the private sector is just much more efficient than the state can ever be, but I have never been able to find evidence-based studies for or against this. It always seems to taken as axiomatic. Can anyone point me to unbiased work that has been done on outcomes in outsourcing of state functions?<p>As someone who works in the private sector, I find the idea that it is just intrinsically more efficient than <i>modern</i> state organisations to be pretty hard to believe. But thats just anecdotal, and I'd like to know more and maybe have my opinion modified.
Sometimes outsourcing works, sometimes it doesn't. Highlighting a few examples in which it has failed does not lead to the conclusion that it never works.<p>So the author seeks to bridge the gap by identifying a fundamental flaw in the concept of outsourcing, in this case by noting the divergence of objectives between the two parties. Although true, this isn't the fundamental flaw the author is looking for. It simply identifies the importance, for outsourcers, of making their suppliers' objectives coincide with their own.<p>I wouldn't say the G4S case is one in which the government has failed in making objectives coincide. G4S will, in all probability, be found in breach of contract for failure to fulfil their obligations, and the government have already stated they will be seeking to recover costs from G4S, such that there will be no additional cost to the taxpayer for this debacle.
While I'm no fan of G4S or PFI projects, this article is just empty wind.<p>Where is the <i>evidence</i> that "cash [...] is redirected into shareholders' pockets"? This would be an ideal topic for a scientific study: do outsourced projects cost less for the buyer, or do they cost the same/more and does that extra money go to shareholders? Unfortunately reading this article will not tell you the answer to this or other interesting questions.
The problem is not outsourcing, it's thinking that you can outsource (or delegate) and important task and not pay attention to it's execution.<p>Good management breaks outsourced projects down into replaceable, manageable chunks. This is important for oversight and for competition. If you size an outsourced chunk of work correctly, then you should be able to increase competition for that contract. If you structure the contract correctly, your oversight should be able to identify and replace problemed contractors.<p>These guys are all smart enough to know that. It's just that they are also all smart to know that it is easier to avoid political responsibility for failures when it can be blamed on an outside contractor.
I completely agree with the thesis of the article; that outsourcing leads to inflexibility is performed by a staff that is not necessarily invested in the goals of the organisation. However, how does this apply to providing security for the Olympics, a once-off event that may not return to London for another 50 years? A city can't be expected to constantly maintain a police force capable of covering an event of this size.