IT Outsourcing Not The Answer
Feb 04, 2009
eds, government,, it,, outsourcing,, privatization,
One of the key political dynamics of our time is the pressure on governments to provide more public services with fewer resources. With an aging population, deteriorating urban infrastructure, expanding immigration and globalization of commerce, governments of every level are faced with greater demand for public services. At the same time, taxation seems to be a limited resource and a politically unpalatable means of meeting these needs.
One area of public services that seems to be outsourced more than others is that of information technology (IT). In British Columbia, the Campbell government is on the verge of signing a major contract with EDS Advanced Solutions to take over the operation and maintenance of the mainframe computer servers that contain all provincial government documents and emails. Manitoba Public Insurance also outsources a significant part of its IT work to EDS.
In BC, and doubtlessly in other jurisdictions taking similar steps, sensitive government records will now be accessible to multinational corporations. Even more worrisome is that EDS has a history of repeatedly losing citizens’ confidential personal information in other countries. In 2008, EDS Britain lost a UK Ministry of Defense hard drive that contained the personnel data of more than 100,000 armed-forces workers. They also lost a hard drive with personal details of more than 5000 British prison officers, and were at the centre of a scandal in which personal information on 25 million British citizens who receive child benefit cheques went missing.
Privacy issues are obviously paramount in cases such as these. Making things even more serious is that the US Patriot Act allows the FBI to access personal information from US-based companies, without citizens’ knowledge. Contracts such as these place citizens’ personal information at risk of scrutiny and exposure.
Furthermore, as governments devolve services to private contractors, they lose operational control of them. Though most government services continue to be provided by public agencies, the balance that allows them to maintain accessible and quality services becomes precariously close to being lost.
Yet another reason outsourcing is problematic is that it is usually costly in the financial sense as well. In the mid-1990s, Manitoba Health contracted out ancillary healthcare IT services to the Royal Bank. Known as Smart Health, the project was shortly thereafter sold to a Texas-based company. The contract was cancelled in 2000 after auditors found that the project was poorly managed and had delivered a “low return.” What they meant was that $30 million had been expended with almost no result by the time the contract was terminated.
It is very likely that we will continue to see “creeping privatization” of public services, whereby small, oftentimes imperceptible shifts away from public service delivery continue to accrue without a lot of attention being paid to them. Over time, these changes will begin to have a significant detrimental effect on the quality of services that are offered to the general public. Privatization remains a threat to all public services, and vigilance is required to ensure that governments of all levels are continually reminded that public services must remain as such wherever possible.
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I'm glad you're bringing light to this. This is something that governments have been doing for years. Not only does it threaten gov employees jobs, but it could be a security breach in the making. The more third-parties that have access to information and housing information, the more chance there are for the info to get into the wrong hands.
Jerry - 2009-02-11 09:15