UK biz needs fattening up on gov IT contracts, says No10 bod Tim Luke, a policy adviser to Number 10, wants Blighty's government IT contracts spread more broadly and punting more money towards companies that don't to sell out abroad. He also thinks kids should be taught to code like real men. Luke advises Downing Street on business and enterprise, and was speaking to silicon shippers …
That British taxpayers money is spent on contracts awarded to giant multinationals, who take the lions share as profit and outsource the work to India. The money mostly goes to the US, the employment opportunities mostly to India.
It seems first-order common sense to try and keep government spending within the country wherever possible.
Sorry "shame" has nothing to do with it. This is a natural result of the "globalization" - work will go to the location where it can be done at the lowest cost point. We have signed trade agreements which enshrine the right of BIG Corp to do that. Should have thought before signing that first (a reasonable size country cannot live solely off its financial services, even Switherland has industry and manufacturing nowdays and it is probably more per capita than the UK).
Even if we did not have WTO, Britain is still a part of the EU and EEA so as long as British average cost per IT worker is higher than somewhere else in the EU the work will go somewhere else in the EU. This realistically means Ireland or Ireland, because UK costs per IT worker (salary, taxes, social security, benefits, etc) nowdays are actually lower than even some places in Eastern Europe.
So if he is so worried about work staying in Britain he should actually say in clear terms that Britain should pull out of WTO. As far as IT is concerned there is little point for pulling out of the EU as most of the EU actually pays their IT bods more money (if you include pension and other factors in this).
C'est la vie - live by the treaties and accords you sign, die by the treaties and accords you sign.
@ac 10.49
Thats a very well thought out, lucid ,helpful and articulate response to the unfortunate situation you highlight.
so why the hell post Anonymously?
I'm all for being able to be anonymous online when required, but we're all just a bunch of techies have a discussion here arnt we?
Besides which the handle you signed up with is pretty anonymous anyway!
What cobblers. At this very moment, whilst bellowing the advantages of "keeping it in the country" the Government is actively giving money to some FE Colleges for a project actively investigating the outsourcing of administration to India ... I think the word rhymes with 'bankers' and is nearly as vulgar.
If the UK government would purchase more IT solutions based on Open Source projects, the local developer community could benefit economically, as it is much cheaper, easier and technically superior to adapt open source systems (such as Drupal, Alfresco, Postgresql, Linux, BSD, OpenOffice, Inkscape, SVN, LaTeX, Apache, Tomcat) to the specific needs of a government organisation.
That way the British economy would benefit much more than by shelling out money to the American software super-corporations. Alfresco and Ubuntu are even British companies !
List of Open Source equivalents to commercial software:
MS Windows - Linux, BSD
MS Office - Open Office, LaTeX, Inkscape
Office Open XML - Open Document Format, TeX, SVG
Oracle - Postgresql
SQL Server - Postgresql
MS Sharepoint - Alfresco, Subversion
MS IIS - Apache, Tomcat
Open Source is much more secure. There is still no Virus Problem on Linux - because of systematically better practices (everybody can review, shoddy coding is exposed, social pressure to fix issues immediately) and because of systematically better technology (single application repositories, sandboxing, proper use of admin accounts).
Actually, Linux and BSD are a major defensive tool in the apparently ongoing cyber-war. There is a reason for NSA creating SE-Linux, as opposed to creating SE-Windows.
Do you have any new arguments? People have been repeating these arguments for what now seems like eternity. All you're doing here is posting stuff that the readers already know and the people you want to persuade will most likely never see. Try putting as much thought into your posts as your moniker.
Now let them walk the walk.
First small companies can't offer comfy directorships to failed politicians.
Small companies can't offer nice days out and backhanders before offshoring hundreds of jobs.
Small companies can't afford to manufacture in the UK through a combination of
import taxes on components - Raspberry Pi.
Stiffer employment and health & safety rules (subsidise maintenance / tax import goods that don't have similar standards).
Can't employ cheap overseas staff using ICT.
Can't offshore easily - Maybe insist UK Government data can only be handled by a UK citizen who is a UK tax resident security vetted as such. Imagine that is legal many customers insist on the first part.
Small companies allegedly cannot get on the government contracts because they are small companies. Change that and favour any company that will keep money in the UK, make it part of the contract the employment will stay in the UK and the profits won't pass through a tax haven.
Programming is a science like Maths and physics, it can also be an art (there is normally more than one solution to most problem). The discipline of planning, recursively developing, testing and documenting is something most companies and employees would benefit from learning.
The proud ignorance of technology displayed by many employees in the UK (Young & OLD) is frightening Most employees will use a form of computer every day.
So the upshot is we spend UK tax money on supporting activity that UK and EU regulation make uneconomic or are just uneconomic in the UK, thus keeping skills, employees and investment from better alternatives.
Into the bargain breaking pretty much every EU procurement and state aids law.
After it worked so well for ICL didn't it?
The patent box: suits one business model only (mostly pharma ...) and takes money away from the business neutral R&D tax credit and gives business a tax incentive to sell things - as they don't normally concentrate on selling things do they?
(One could say the same on the break for gaming - lets invest in transferable skills and then support a single application of them and prevent market optimisation ...)
Um maybe concentrate on a better regulation and taxation policy (um you know - like the coalition promised) rather than break tax simplification policies, procurement policies and value for money principles.
Dear Number 10 & HMT please learn basic market economics and recognise money is fungible and stop micro-interventionist strategies. Yes I know good policy is hard and micro-interventions make speeches easier but results do count in the end.
There's no particular reason a UK company should focus on UK government requirements as in global terms UK is quite a small market, in most sectors UK gov is small and our advantage is the ability to sell overseas easily so lets go for the broadest possible market if you want growth. Fine if its a commercial choice on a level playing field - no barriers - but lets not distort huge chunks of the domestic markets and go for dependency based support mechanisms.
Oh - ditto for environmental legislation. If you need a new one it means the old ones aren't working so go back and fix 'em.
With some government departments and agencies expected to cut 20% from their budget, and even those like the NHS supposed to save to invest they will continue to go for services that cost less, doesn't matter about the wider economy, only their targets.
It is easy to show a drop in expenditure in your own department, easy to collect the bonus attached for meeting the target. No agency or department will try to justify an increase in their costs with a drop in anothers, it's too difficult.
So contracts will continue to go to the largest suppliers with the lowest costs and jobs will continue to move to India until it's cheaper to go to somewhere else.
Managers are to selfish and stupid to recognise this, and ultimately the Tresury doesn't care, the current government will continue to drive costs down regardless of employment numbers because they are not capable of thinking differently. Labour would be no different. Sadly those in the major parties who understand this have little influence.
I run a small business in Ireland which services the UK public sector so I have a vested interest in free trade in services, but I'm sure there are small businesses in the UK which service the Irish public sector too.
I'm not quite sure what "punting more money towards companies that don't to sell out abroad" is supposed to mean, but protectionism is destructive to everyone and governments should procure on the basis of value for money for the taxpayer.
Public sector procurement is hard enough for the civil servants to get right without introducing criteria for supporting the UK economy. Does the government foresee procurement panels being forced to choose a crappier or more expensive service because it comes from a UK supplier?
*applause*
'Does the government foresee procurement panels being forced to choose a crappier or more expensive service because it comes from a UK supplier?'
And in the extreme reductio ad absurdum argument - a few people in protected jobs with transferable skills so that we can have worse public services.
Well I suppose its one way of closing the productivity gap between public and private sector - just from the wrong direction.
"Does the government foresee procurement panels being forced to choose a crappier or more expensive service because it comes from a UK supplier?"
Perhaps they forsee doing things sensibly - forcing procurement panels to let smaller businesses in the door to pitch/demo to them, instead of just handing it straight over to the usual suspects, which is the problem it's trying to address.
I'm sorry if this would disadvantage you, but strictly speaking - you're part of the problem.
We develop a massive manufacturing base, then sell out the tech and the jobs to other countries.
Result: Trains are build in Germany/Italy wherever, car firms are bought by the Germans/Chinese and production shifted to those countries, our aerospace industry is 'encouraged' to become so bloated and lazy that the cheapest option is to merge them all and then kill off all investment in manned aircraft and airliners.
I could go on, but you see my drift.
The UK had the biggest manufacturing base in the world for a good few years in the years before the 20th Century, but we got lazy. The fat cats had 'silver service lunches', the unions decided that damaging the product, damaging the brand, and their own self interest was more important than getting the product out of the door. The result? Expensive, poorly produced products that the public turned their backs on. Why do we all drive foreign cars? Cos they are well built (generally), reliable and cheap.
I refer people to the book "Empire of the Clouds" for a good look at why our aero industry failed, just when it should have been prospering.
But, to come back to my earlier point, we always sell to the highest bidder, and that bidder doesn't have the UK's best interest at heart. Why else are the vast majority of our energy supplies held by foreign companies? We sell to make a quick buck and sod the consequences!
why does everything have to be done at the lowest price? We should accept some things are done less economically to keep an industry going and grow a pool of talent+give your bloody citizens something useful to do with their lives.
Also things like roads and trains. necessary for the efficiency of your country so accept there is some cost involved.
The whole place looks like its being run by some snivelling miser stashing cash in a mattress.
Anonymous Coward said: "even Switherland has industry and manufacturing nowdays"
- as a proportion of the economy, Switherland's manufacturing is up there with Germany's.
- why is no one addressing the major problem raised here? - that small UK companies sell-out ASAP. Should any ex-employer be reading this, I'm not talking about my experience - I'm talking about all the people I meet at tech events (e.g. the people who sold out their excellent small company to a bunch of idiots without doing any providence check before accpting the dosh, etc.)
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