From in-house to outsourcing back to in-house again, government IT seems to have gone full circle in the past 50 years.
While government began to see the value of technology and computers in the 1950s, it wasn’t until Harold Wilson’s Labour government came in to power in 1964 that IT became a crucial part of Whitehall with the establishment of the Ministry of Technology.
The Labour Party’s 1964 general election manifesto stated that the ministry would “guide and stimulate a major national effort to bring advanced technology and new processes into industry”.
This was the ministry that, led by minister of technology Tony Benn, began the initiative to create a British computer industry with the formation of ICL in 1968. This came about through the merger of International Computers and Tabulators (ICT) with English Electric Computers, which itself had acquired Elliot, Leo and Marconi.
In Whitehall, however, the Technical Support Unit, which later became the Central Computer and Telecommunications Agency (CCTA), was the driving force.
Set up in 1957, its job was to advise central government on computers. But its role widened during the following decades and it became the central procurement agency for technology in government.
However, it took a long time before technology began playing the part it does today.
Longhand code and punchcards
Ray Long, chair of the British Computer Society, first began working in government as a computer programmer in 1977. He says when he first joined as a programmer, they used punchcards, wrote the code in longhand and walked over to the typist with it.
“One of my 'wow' moments was when spreadsheets were introduced in the then Department of Health and Social Security in the early 1980s. I thought it was really going to change things,” he says.
The big change, however, began taking place in the mid to late 1980s, when the advent of outsourcing began to take hold in government.
“When I began working in government everything was done in-house, but in the late 1980s the government took advantage of the skills in the private sector, and so the era of outsourcing began,” says Long. He remembers working on writing a payroll package for use in-house and departments having their own printing works.
“As a programmer in the 1970s, we relied on the private sector for hardware, but less so for anything else. There was an increasing awareness that we weren’t so different in government from anyone else, which led to the outsourcing contracts,” he says.
Citizen awareness leads to outsourcing
The move to outsourcing was also driven by a change in the civil service. Michael Bowyer, director of innovation and knowledge sharing at Innopsis, says when he first started his career as a systems engineer, working with large Crown departments, the attitude of civil servants was very different from today.
He says in one of the first briefings he had with a senior civil servant, he was sat down and told that “citizens have no constitutional right to speak to a civil servant. We’re not here to serve the public”. Instead, they were there to provide information to ministers.
The attitude shift in the late 1980s, when the civil service became more “citizen aware”, he says, was part of the drive to outsourcing. “Suddenly departments needed IT systems that not only served them, but the rest of the country and its citizens too,” he says.
“But the IT systems were inadequate to meet the requirements, so it created this artificial boom when departments want to scale up the technologies.”
Jerry Fishenden, former government deputy CTO and now director and CTO at Voetek, says in the 1980s “there was a move generally to transition a lot of ‘non-core’ government service out of government and into the hands of third parties”.
“This has been labelled the era of new public management, or NPM. This move to NPM and pushing all IT out was a pretty big step,” he says.
Underperforming IT
By the mid-1990s, the idea that IT could improve the efficiency and openness of government was strongly planted. However, the government’s ability to really take advantage of IT comes much later.
“IT went from just being there to keep the lights on to being an enabler to do things differently,” says Ray Long.
The early 2000s brought on even more outsourcing. With Tony Blair as prime minister, the government was going through a period of reform and modernising services.
Jessica Figureas, chief analyst at Kable, says accessing private sector expertise became even more important under Blair.
“The idea was that the government would focus on the citizens, and the provision of IT would be the responsibility of third-party suppliers,” she says.
The biggest of those large outsourcing contracts was the HM Revenue & Cuistoms Aspire contract, costing the government £600m a year. The Aspire deal came to be seen as the pinnacle of ineffective and high-cost IT contracts in government.
By the mid-1990s, the idea that IT could improve the efficiency and openness of government was strongly planted
“There have been a number of high-cost IT initiatives that have run late, under-performed or failed over the past 20 years,” the report says, referring to programmes such as the IT system that was aiming to underpinned the (failed) National ID Card Scheme and the Rural Payments Agency’s single payments scheme.
Figueras says the idea of the large outsourcing contracts was that the government “would only have one throat to choke should something go wrong”.
“The idea was we gave all the hassle to the systems integrators,” says Figureas.
Large system integrators dominated government IT throughout the Noughties. In 2004, the National Audit Office found that 80% of central government IT work was undertaken by 11 suppliers. In 2011, the figure slightly increased to 18.
Going full circle
In 2010, the wind began to shift direction again, driven partly by the change in government.
From a long-standing Labour government, the UK suddenly had a Coalition government, which brought with it a new philosophy.
Among the big drivers was Liam Maxwell, who joined the government as an IT advisor in 2011 and later became CTO. In the run-up to the 2010 general election, he helped draft the Tory technology policy, having been involved in a technology think-tank, the Network for the Post-Bureaucratic Age, that proposed dismantling the IT systems and business ecosystem established by Labour.
He co-authored the report Better for Less, which set out many of the tech policies he has since introduced to government. It was this report that became the building blocks of the dismantling of outsourcing contracts we see today.
The creation of the Government Digital Service (GDS), first under the leadership of Mike Bracken and now Stephen Foreshew-Cain, founded the groundwork for the actual changes. These include moving to platform-based systems, buying from small and medium-sized enterprises (SMEs) and bringing IT skills back to the departments themselves.
“It’s about taking back control, but it’s really hard to gain that back. Departments haven’t really run their own IT strategy for years, and they haven’t needed to have the skills in-house,” says Figueras. “With the big outsourcing contracts, the supplier would do all the strategic thinking.”
The dismantling of the large outsourcing contracts is now in full force and insourcing is the flavour of the decade. “We have gone full circle,” says Figueras.
