Outsourcing, bureaucracy and public value: reappraising the notion of the “contract state”

Large-scale outsourcing of information technology in the U.K. public sector – the NHS, the Inland Revenue, and the Department of Social Security over the years – raises a number of critical issues not just for how outsourcing can be conducted in public sector contexts but also about the efficacy of such arrangements in terms of enforcement of democratic values. We argue that marketization's target may well be bureaucracy, but the organizational form is a repository for democratic, civic, and public service values that can be eroded through how outsourcing has been conducted. The call for a reevaluation and the case for a distinctive public services management ethos are made if such values as equality, impartiality, communal good and public service are to be pursued and delivered. Selective outsourcing is revealed as effective – together with much needed rebuilding of internal capabilities – in keeping control of IT destiny, delivering on public service requirements, and managing external supply. The U.K. experience, we suggest, provides salutary learning for public services in other developed economies.