I was asked to comment on the suggestion that outsourcing necessarily involves the setting of targets and thereby brings with it all the ills associated with that approach such as distortion of behaviour from service to form-filling.
It occurs to me that in principle the new, non-target approach (let us call it systems management) should be applicable to all organisations including those who take up government contracts (outsourcing). Active systems management by enlightened senior staff could ensure those organisations are properly run; really delivering what the customer (citizen) wants.
The problem lies in two key and related areas; whether what the government wants is what the customer (citizen) wants and also how the government holds the contractor to account.
Government itself has to be clear about what citizens want (more properly need) and, if it manages that difficult task, it could then check to see whether systems management is being applied (hard?) or set targets (easy) in order to ensure the correct outcomes.
I think, therefore, that outsourcing might work given the correct systems management approach is applied through the processes in both organisations. However that would involve a lot of effort that might outweigh any financial gains and degradation of effective management and control of outcomes as the distance between the responsible supplier (government) and citizen is stretched.
So, outsourcing is at best a risky venture and at worst a guarantee of reduced service.