Our beliefs about nationality are mixed and malleable, and may help explain attitudes toward immigration


By Christian Jarrett

What is nationality?

Is it something fixed that we inherit biologically from our parents or is it a characteristic that we can change and acquire? A new study in Nature Human Behaviour is the first to study people’s “folk theories” about nationality – based on surveys of US and Indian participants – and the results show that, at least in these countries, people are broadly sympathetic toward both these contrasting theories of nationality at the same time, although with a bias toward the fluid theory.

The relative strength of people’s endorsement of the theories at any given time depended on the way questions about nationality were framed, the researchers found. Moreover, and perhaps most interesting for future investigation, the results showed people’s ideas about nationality were tied to their attitudes toward immigration, even after factoring out any differences in political leanings. Mostafa Rad and Jeremy Ginges at the New School for Social Research and Princeton University surveyed a total of 2013 US participants and 732 Indian participants. They presented the participants with variations of the following scenario:

Please imagine the following: A child is born to Pakistani parents but is orphaned at birth. When the child is one day old, they are adopted and raised by an American family and are never told about their origin.”

Next, the participants were asked, “all things considered”, to rate how much, from 0 to 100 per cent, the child will match the nationality of his or her birth parents, or – in a different framing – they were asked to make the same assessment for how much the child will match the nationality of their adoptive parents (debriefing clarified that, as hoped, the participants were considering nationality, not citizenship – which depends on more obvious and explicit legal stipulations that vary in different countries).

The participants’ views on what governs nationality varied according to the framing of the question – on the one hand, they stated on average that the child would share 77.8 per cent (US participants) or 74.2 per cent (Indian participants) of their adoptive parents’ nationality, suggesting a fluid view of nationality. Yet, when the question was framed around the birth parents’ nationality, the participants also stated that the child would share 39 percent (US participants) or 45.4 per cent (Indian participants) of their birth parents’ nationality, on average, indicative of a more fixed, genetic-based folk theory of nationality.

Varying the scenario wording so that the birth and adoptive parents’ skin colour was the same or different (based on ethnic and national stereotypes) made little difference to participants’ rates of agreement with both the fluid and genetic folk theories of nationality.

People hold contradictory ideas about nationality

The results suggest that, at least in the US and India, a lot of people hold in their heads two contradictory theories about the roots of nationality at the same time.

“Cultural evolution may have favored such flexible reasoning about the acquisition of nationality,” the researchers said, “as the ‘malleable’ theory allows for a rapid expansion of the group, whereas the ‘fixed’ theory suggests an inborn and immutable essence that gives a sense that nationality is more than a mere social contract but an ineffable primordial attachment encouraging deep moral commitments.”

Rad and Ginges were able to explore some of these dynamics by tweaking the wording of the question that they put to participants. For instance, they tried out versions in which the child’s birth parents happened to share the participant’s own nationality (while the child’s adopted parents had another nationality), and versions in which this was reversed, so that it was the child’s adopted parents who shared the participant’s own nationality.

Results for these different permutations of the vignette showed that participants generally saw their own nationality as harder to relinquish but easier to acquire, as compared with a foreign nationality (which they saw as easier to lose, but harder to gain). In the era of Brexit and Trump’s “great, great wall” these results may surprise some: “… [F]olk theories of nationality are biased towards immigration and against emigration, perhaps facilitating ingroup expansion,” the researchers said.

At the same time, as you might have predicted, the results showed that, in terms of differences between individuals in the strength of their belief in the different folk theories, those people who more strongly endorsed a fixed or genetic-based theory of nationality tended to have more hostile attitudes toward immigration, even after factoring out any differences in political leanings.

“Future work could build on our results to model social and political factors that may influence the distributive strength of malleable versus fixed conceptions of nationality,” the researchers concluded, “helping us to predict variations in attitudes towards migration across time and context.”

Christian Jarrett (@Psych_Writer) is Editor of BPS Research Digest

Cielo is a Leader in recruitment process outsourcing

“As we continue to explore new frontiers in technology, extend our reach to new places around the world and break new ground in the candidate and client experience, we remain committed to maintaining the high quality of service our clients expect from us,” said Sue Marks, Cielo’s Founder and CEO. “Once again being recognized as a Leader by Everest Group and their peers in the analyst community shows sustained excellence even as we focus on growth and plan for future success in a fast-changing market.”

Everest Group’s 2018 Recruitment Process Outsourcing Service Provider Landscape with PEAK Matrix Assessment evaluated 21 established RPO service providers based on the absolute as well as relative year-on-year movement for specific criteria, including market success, scale, scope, technology capability, delivery footprint and buyer satisfaction. The providers were then categorized into three categories: Leaders, Major Contenders and Aspirants. Leaders, like Cielo, were placed in the top quadrant for both market success and delivery capability.

Cielo was highlighted specifically for the launch of Cielo TalentCloud, a suite of three technologies that includes: SkyRecruit, an exclusive CRM platform that provides the most advanced and recruiter-friendly tools for targeting, nurturing and engaging top talent; SkyAnalytics, a platform that provides prescriptive and actionable insights from market and internal data sources; and SkyLabs, an innovation engine whereby Cielo tests and pilots new and emerging technologies, tools and processes to understand how they could (or would not) help clients reach their goals.

“Cielo’s focus on enhancing its technology and developing new and innovative solutions for its customers has enabled it to stay ahead of the competition, which is reflected in Cielo being consistently featured in the Leader’s quadrant in Everest Group’s RPO PEAK Matrix,” said Arkadev Basak, Vice President, Everest Group.

About Cielo

Cielo is the world’s leading strategic Recruitment Process Outsourcing (RPO) partner. Under its WE BECOME YOU™ philosophy, Cielo’s dedicated recruitment teams primarily serve clients in the financial and business services, consumer brands, technology and media, engineering, life sciences and healthcare industries. Cielo’s global presence includes 2,000 employees, serving 154 clients across 92 countries in 36 languages. The industry has verified Cielo’s reputation for executing innovative solutions that provide business impact through numerous awards and recognitions, including its #1 position on the HRO Today RPO Baker’s Dozen listing, PEAK Matrix Leader placement by Everest Group and Industry Leader designation by NelsonHall. Cielo knows talent is rising – and with it, an organization’s opportunity to rise above. For more information, visit cielotalent.com.

Cielo Contact:
Matt Quandt




Government contracts still driven by price

Price still main driver in outsourcing selection

Outsourcing sector bosses have told MPs that the Government’s procurement proposition had gone “too far” in a quest to keep costs down and that the system needs overhauling, in the wake of Carillion’s collapse.

Speaking to a parliamentary select committee on Tuesday morning, Rupert Soames of Serco said that in his four and a half years leading the company, the only contract he could remember winning on any factor other than price was to manage facilities for Barts Health NHS Trust. Mr Soames said this proved that Government outsourcing was still mainly based on cost, rather than the expertise that private companies could offer.

Phil Bentley, chief executive of Mitie who was also appearing before the committee, said: “There’s always this drive to the lowest price as the easier answer.” He added that he thought more conversations between the public and private sector prior to a contract being awarded would help. “Innovation is taken out of the bids because the OJEU rules [for tendering work] are about creating a level playing field,” he said.

The committee was meeting as part of a wider investigation into the way the Government uses the private sector for services such as running schools and prisons, following the collapse of outsourcing company Carillion in January.

Spend more time spent abroad and find yourself

A gap year abroad can broaden more than your horizons

by Emma Young

The idea that taking a gap year allows you to “find yourself” is often derided. But if you spend that time living in one foreign country, it just might. And if you can make it years, even better. 

Hajo Adam at Rice University, US, led what his team say is the first empirical investigation of the effects of living abroad on “self-concept clarity” – how clearly and confidently someone defines who they “are”. Since people are increasingly spending time living abroad for work or study – and since other “transitional” life experiences, such as getting a new job or getting divorced have been associated with decreases in self-concept clarity – it’s important to study this, the researchers write in their paper in Organizational Behavior and Human Decision Processes.


The researchers recruited a total of 1,874 people to take part in a series of studies. The first involved 296 people, recruited online. Half had lived abroad at some point. They all completed a 12-item self-concept clarity scale, indicating the extent to which they did or didn’t agree with statements like: “In general, I have a clear sense of who I am and what I am” and “I seldom experience conflict between the different aspects of my personality”. Those who had lived abroad had a clearer self-concept.

But might this be because this type of person is more likely to pursue opportunities abroad? To find out, the team recruited 261 more people, 136 of whom had lived abroad. The others hadn’t yet, but had definite plans to, with most intending to move within around nine months. As well as the self-concept clarity scale, participants completed an assessment of their “self-discerning reflections” – such as: “I have figured out if my relationships with others are driven by my own values or follow the values of those around me” and “I have determined whether my personality is defined by who I truly am or by the culture I grew up in”. 

Those participants who’d already lived abroad had clearer self-concepts than the others who shared the same plans to live abroad but hadn’t travelled yet, and this was explained statistically by their higher scores for self-discerning reflections (this was after controlling for a range of demographic and personality variables). These results suggest that time abroad increases self-discerning reflection and in turn this leads to greater self concept clarity.

Other studies the researchers conducted, including in some cases with students from dozens of different countries, led them to conclude that it’s total time spent living abroad – rather than the number of different countries lived in – that makes for greater self-concept clarity (among these participants the average time spent living abroad was 3.3 years). Greater clarity can also have a practical advantage: international students who’d spent more time living abroad reported feeling clearer about their future career direction, an outcome that was mediated by increased self-concept clarity.  

“The fact that we found consistent support for our hypotheses across different subject populations…mixed methods…and complementary methods of self-concept clarity…highlights the robustness of living abroad on self-concept clarity”, the researchers write. “The present research is the first to show that living abroad can change structural aspects of the self-concept.” 

Other research has found that living abroad can influence the content of a person’s self-concept – with words such as “adventurous” being added to their self-descriptions. But the new findings suggest that, because living abroad, away from your usual cultural environment, allows you to confront and perhaps redefine what truly is and isn’t important to you, it also leads to improved confidence in and clarity about who you are.  And the longer you live abroad, the more self-discerning reflections you’re likely to have, the researchers write.

The paper concludes with a quote from a 1919 book called Travel Diaries of a Philosopher by German philosopher Hermann von Keyserling: “The shortest path to oneself leads around the world.” The researchers add: “Almost 100 years later, our research provides empirical evidence in support of this idea.” 

Emma Young (@EmmaELYoung) is Staff Writer at BPS Research Digest

The shortest path to oneself leads around the world: Living abroad increases self-concept clarity

A crisis in local government outsourcing

News of the latest outsourcing giant to hit choppy waters

Following the collapse of Carillion in January and the losses reported by Capita the announcement of a massive drop in Interserve’s share price comes like the arrival of the proverbial third bus.

And although each company is different they have certain similarities which raise important questions about the balance between the public and private spheres.

All three are – or were, in the case of Carillion – companies spanning the continents and offering services in a dazzling array of sectors.

Capita is very much a child of local government – started back in the 1980s when senior CIPFA staff saw an opportunity to set up on their own and provide outsourced services to councils – but quickly grew into a multinational business operating in Europe, Africa and Asia, with about half its business in the public sector and the other half in the private sector.

Most of Carillion’s business was in the United Kingdom, but it also operated in several other regions including Canada, the Middle East and the Caribbean.

Interserve, the latest to run into trouble, operates in more than 40 countries, providing services to a wide range of industries including oil and gas, civil engineering and construction and providing facilities management at UK embassies throughout Europe.

Business logic might suggest the wide range of skills and experience offered by this kind of international, inter-sectoral organisation can be a big plus. Local government and other parts of the public sector – the NHS, for example – can benefit from the entrepreneurialism and know-how of senior personnel in business. Oil and gas industry executives no doubt have much to offer town hall managers.

But such size and diversity can also be a weakness. Like the Roman Empire, when an organisation becomes too big and geographically spread, it can become difficult for its different wings to co-ordinate and follow the same overall objectives, potentially leading to confusion, duplication and waste. Nevertheless, giant outsourcing companies have become part of the local government landscape and many councils depend on them. Further crises would be bad news for all concerned, not least the employees whose jobs may be threatened.

Unlike Carillion, Capita and Interserve have time to turn their businesses around and look forward to better times. Capita points out that its reported losses were caused by a write-down of goodwill and that its underlying profits actually amounted to £400m.

But taken together the recent spate of crisis stories suggests a picture of local authorities and other parts of the public sector beholden to huge multinationals at the mercy of uncontrollable market forces. It seems to suggest that for all their advantages, massive multi-national conglomerates operating across a wide variety of sectors may not be the ideal partners for the more focused and stability-minded world of local government.


Aberdeen council leaders won’t rule out more outsourcing in bid to save £250m

Aberdeen council leaders have refused to rule out outsourcing services.

The authority is aiming to trim around £250 million from its budget in five years as part of a massive restructure and has already proposed cutting 370 jobs through voluntary and early redundancy.

Yesterday members of the strategic commissioning committee clashed when the opposition SNP group proposed a ban on any council services being outsourced in the future.

Group leader Stephen Flynn said: “I believe we now have the option to draw a line in the sand and tell our staff there will be no more outsourcing of services.”

But Aberdeen Labour’s Sarah Duncan told members she was “not ideological” about the issue – pointing out that services such as road repairs and cleaning were already often carried out by contractors.

The SNP amendment was defeated by six votes to three.

New cross-cultural analysis suggests that g or “general intelligence” is a human universal

GettyImages-685703560.jpgBy Alex Fradera

Intelligence is a concept that some people have a hard time buying. It’s too multifaceted, too context-dependent, too Western. The US psychologist Edwin Boring encapsulated this scepticism when he said “measurable intelligence is simply what the tests of intelligence test.” Yet the scientific credentials of the concept are undimmed, partly because intelligence is strongly associated with so many important outcomes in life. Now Utah Valley University researchers Russell Warne and Cassidy Burningham have released evidence that further strengthens the case for intelligence being a valid and useful concept. Their PsyArXiv pre-print presents a cross-study analysis suggesting a single intelligence-like factor underpins mental performance across a wide range of non-western cultures.

Thanks to work pioneered by Charles Spearman, we know that in Western populations performance on a range of mental tasks seems to reflect a more basic mental ability, a “general intelligence” or simply g. 

You can’t see g – it’s a statistical reality more than anything else, but it’s very robust, and modern research suggests that the g factor accounts for roughly half the variability in performance within and between people on all kinds of mental tests. Being strong verbally doesn’t guarantee you will be mathematical too, but it tips the odds strongly in your favour. 

But it’s conceivable that g is not culturally universal – after all, there are many countries, especially non-Western, where relatively greater value is placed on the social and emotional aspects of intelligent behaviour (and where these non-cognitive skills are more closely tied to a successful life) – for instance, in Zimbabwe it is considered socially intelligent to prioritise caring for your relatives over friends or strangers. Also, people from different cultures performing the same task will often tackle it in a different way: past research found that Zambian children struggled in a traditional expression task using pen and paper, but were talented clay-moulders, for example. Could these cultural variations in behaviour and in the conception of what is considered smart reflect fundamental differences in how minds work? 

To find out, Warne and Burningham searched the literature to find mental ability studies in non-industrialised, non-Western cultures (defined as less than half the population being White or European). They selected datasets that included participant results on four or more cognitive tasks so that it was possible to perform a “factor analysis” to identify how many factors seemed to be driving variation in performance across the different tests. Mostly there were standard intelligence measures, but also other types of test, including Piagetian development tasks, and tests designed to be specific to the cultural conditions, such as children’s willingness to interact with unfamiliar toys after seeing them used. 

The analysis covered nearly 100 datasets from 31 cultures including Thailand, Uganda, Papau New Guinea, Guyana – from every inhabited continent and world region save Europe and Australia. The median sample size was 150, but due to some very large samples Warne and Burningham were working with 50,000 participants in all. They wanted to explore which cultures and which sets of tasks featured performance variation that could be reduced down to one factor akin to g, and which would firmly resist.

There are many ways to do factor analysis, especially around the decision rule of when to stop generating underlying factors, and this choice obviously influences the results that follow. Warne and Burningham argue that they chose rules that are deemed the most accurate in these sorts of circumstances, and they ran the analysis with two versions of the decision rule for safety, but it’s worth noting that others may disagree and to remember that this study is a pre-print so it has not yet been subjected to peer review. 

Using Warne and Burningham’s rules, between three quarters and four-fifths of the datasets immediately yielded just one factor that explained variability in participants’ performance across different tests. In other cases, two underlying factors emerged, but these were similar enough to also end up reducing to one factor in a second round of analysis, saving one single exception. 

Now, reducing variation in test performance to a general factor in dataset after dataset doesn’t mean that it must be the same general factor for all datasets, but it’s an obvious explanation. More so when you note that, on average, the first factor extracted explained almost half of the variance in performance across different tests – very similar to the g research in Western samples. Warne and Burningham state they “are astonished at the uniformity of these results” – given the wide variety of sample sizes, test content, and cultural locations. 

This adds more evidence for g, which we know from previous research correlates with brain size, white matter tract integrity, genetic markers, and also seems to explain mental performance differences in other mammals, from primates to mice. The authors close by doubting whether we will ever solve the disagreement about what the culturally loaded term “intelligence” means worldwide. But we can still do the work to identify properties of the mind that are common to us all, and shape our ability to act in the world.

Spearman’s g Found in 31 Non-Western Nations: Strong Evidence that g is a Universal Phenomenon [this paper is a pre-print meaning that it has not yet been subjected to peer review]

Alex Fradera (@alexfradera) is Staff Writer at BPS Research Digest

Study of long-term heterosexual couples finds women over-estimate and men underestimate their partner’s sexual advances

By Emma Young

Imagine that, during a quiet evening at home watching a movie with your romantic partner, you feel intense sexual desire and sensually put a hand on your partner’s thigh. Your partner does not respond and blithely continues to watch the movie… Is your partner truly not interested in sexual activity, or did she/he simply miss your cue?

So begins a new paper, published in the Journal of Social and Personal Relationships, that explores how accurate heterosexual people are at judging their partner’s attempts to initiate sex – in terms of their ability to the spot their partner’s cues, and also their overall impression of how often their partner makes sexual advances. It’s important, because as the researchers, led by Kiersten Dobson at the University of Western Ontario in Canada, note, “Sexual satisfaction is associated with relationship happiness, whereas sexual dissatisfaction is associated with relationship dissolution.”

Other studies have found that in casual, short-term relationships, men tend to overestimate a partner’s sexual interest (while women either underestimate it, or show no bias either way; they’re fairly accurate). An evolutionary psychology explanation for a male tendency to think women are more interested than they actually are is that – in a casual relationship – while incorrectly perceiving interest and being rejected might not feel great, missing the signs of interest, and so a chance to mate, is worse.

To explore what happens in longer-term relationships, the researchers recruited 120 heterosexual couples aged 18-51 (but with a mean age of 22), who had been together for between three months and 30 years.

An initial, exploratory study involved half the couples. The participants all privately completed a battery of questionnaires, which included questions about how often they and their partner attempt to initiate sex and how often they and their partner turn down an opportunity for sex. Then they rated how often these events typically occur over a one-month period (from “never” to “more than 11 times a month”). 

Next, they read short descriptions of 29 behaviours that might indicate sexual interest (such as “I put my hand on my partner’s thigh”) and were asked to rate the degree to which they and they partner use each of these behaviours to indicate that they are interested in having sex. The participants also completed questionnaire assessments of their sexual satisfaction and love for their partner. 

The results showed that both men and women were pretty good at identifying the behaviours that their own partners use to indicate that they’d like to have sex. However, on average, the women overestimated the number of times that their partner tried to initiate sex, whereas the men got it about right. 

A second, similar, confirmatory study, involving the other 60 couples, found that the participants were again pretty good at recognising the behaviours that their own partner uses to indicate interest in having sex. In this group, the women also thought that their partners made more sexual advances than they actually did (according to the partner data), but only marginally. However, the men underestimated their partner’s advances. 

Again from an evolutionary psychology perspective, the researchers speculate that for men in a long-term relationship, compared with a casual one, the costs associated with missing the signs of sexual interest may be lower (as there will be plenty more opportunities to have sex) and the costs of rejection will be higher (as being rejected by a long-term partner could be more painful). But as the results from the two studies were in part inconsistent, more work is needed before any firm conclusions on bias can be drawn, they note.

When it came to sexual satisfaction and love, people who overestimated their partner’s sexual advances reported feeling more sexual satisfaction. This might be because they felt more attractive and desired by their partner, the researchers suggest. 

On the other hand, people with partners who under-estimated their own advances reported feeling more love and greater sexual satisfaction – perhaps because the under-estimater feels motivated to do something to strengthen the relationship, which may then make their partner feel more satisfied. 

As the researchers note, “Navigating sexual activity can be difficult, especially when partners’ behaviours that indicate their sexual interest are subtle.” 

The researchers would like to see studies investigating how perceptions – and misperceptions – of sexual advances may affect relationships in the long term. But it would also, I think, be interesting to see a more real-time version of this study. Since other work has found that men under-report their own sexual intentions, it’s hard not to wonder whether the women in this study were really over-estimating their partners’ advances. Asking participants to report back daily, or every time they thought they or their partner had made a sexual advance – and whether or not it led to sex – would surely provide more accurate data than retrospective estimates of what happened in the course of a month.

Are you coming on to me? Bias and accuracy in couples’ perceptions of sexual advances

Emma Young (@EmmaELYoung) is Staff Writer at BPS Research Digest

Learning by teaching others is extremely effective – a new study tested a key reason why

GettyImages-2674229-2.jpgBy Christian Jarrett

The learning-by-teaching effect has been demonstrated in many studies. Students who spend time teaching what they’ve learned go on to show better understanding and knowledge retention than students who simply spend the same time re-studying. What remains unresolved, however, is exactly why teaching helps the teacher better understand and retain what they’ve learned.

For a new study in Applied Cognitive Psychology researchers led by Aloysius Wei Lun Koh set out to test their theory that teaching improves the teacher’s learning because it compels the teacher to retrieve what they’ve previously studied. In other words, they believe the learning benefit of teaching is simply another manifestation of the well-known “testing effect” – the way that bringing to mind what we’ve previously studied leads to deeper and longer-lasting acquisition of that information than more time spent passively re-studying.

The researchers recruited 124 students and asked them spend ten minutes studying a text, with accompanying figures, about the Doppler Effect and soundwaves – a topic about which none of them had any previous knowledge – with a view to teaching the material themselves afterwards without notes. Participants were told they could take notes while studying but not keep them for the next stage.

After the study phase, the participants were divided into four groups. In one group participants spent five minutes being filmed alone while they stood and delivered a lesson on the study material without notes (they could use a blank flip chart to draw figures if they wanted). The other groups either spent the same time completing multiplication arithmetic; standing up and teaching verbatim from a set script (including making reference to pre-drawn figures on a white board); or writing down all they could remember from the text (i.e. a form of retrieval practice designed to induce the testing effect).

A week later, all the participants returned to the lab for a surprise test of their knowledge and comprehension of the original study text in the form of six free-response questions that required them to explain key concepts from the study materials.

The critical finding is that the teaching-without-notes group outperformed the group that had spent the same time completing arithmetic problems and the group that had taught from a script, but so too did the group who simply spent the same time retrieving what they’d learned. In fact, the final comprehension performance of the teaching-without-notes group and the retrieval-practice group was comparable.

The researchers said their results suggest that “the benefits of the learning-by-teaching strategy are attributable to retrieval practice; that is, the robust learning-by-teaching strategy works but only when the teaching involves retrieving the taught materials.”

The new findings don’t undermine the notion of teaching as an effect learning method, but they have practical implications for how the learning-by-teaching approach is applied in education and training. “In order to insure that students and tutors learn and retain the educational material that they have prepared and presented in class, they ought to internalize the to-be-presented material prior to communicating it to an audience, rather than rely on study notes during the presentation process”, the researchers said.

Critical readers may take issue with the lack of realism in the study – there was no audience of learners in either of the teaching conditions and therefore no interaction, which surely also plays a part in the learning benefits of teaching. Also, participants in all groups were originally primed to expect to have to teach the material, which may have had learning benefits in itself – perhaps the retrieval group would not have matched the comprehension of the teaching-without-notes group without being primed in this way.

Lun Koh and colleagues acknowledged some of these issues and they called on further research to “assess the importance of retrieval practice across a variety of teaching scenarios and activities.”

The learning benefits of teaching: A retrieval practice hypothesis

Image: Seven-year-old Jacqueline Loman addresses the class at Cheadle High School (Fox Photos/Getty Images)

Christian Jarrett (@Psych_Writer) is Editor of BPS Research Digest

What the outsourcing sector can learn from the Carillion collapse

The death of Carillion triggered an outpouring of theories about the shortcomings of public sector outsourcing. But it’s worth remembering that until that fateful moment in January, the industry was basking in a long series of successes. 

At the beginning of the year, 200 small companies a week were signing up to the Contracts Portal, a scheme created by the government for small and medium-sized enterprises (SMEs) to compete with big corporations for outsourcing contracts. The supplier list passed 22,000 members, up 53 per cent in 12 months. Great news. 

The government announced it was on target to get one pound in three of outsourcing contracts awarded to SME bidders by 2022. That’s two years later than planned, but still good news. 

And the Crown Commercial Service (CCS), founded in 2014 to improve the negotiating firepower of the civil service, was growing into a mature, sophisticated troubleshooter. 

All seemed rosy. And then Carillion went bust and the entire industry went into panic mode. Leader of the Opposition, Labour’s Jeremy Corbyn, called it the beginning of the end for outsourcing. Confidence evaporated and ever since the outsourcing industry has been in crisis. 

Front and centre is the problem of oversized bidders. Yes, the SME bidders were growing in numbers, but the mid-size were getting hammered. 

Denise O’Leary, boss of Purpol Marketing, a construction industry bid-writing specialist, witnessed the calamitous erosion of mid-sized bidders. “The government procurement method of placing value on the largest organisation had already driven the collapse of many regional and local contractors from the supply chain,” she says. 

“In the recession, the larger companies chose to win projects at under cost to keep their teams busy, and cash-strapped local authorities took as many savings as they could, even if they recognised that their selection may not be sustainable for the duration of the project.” 

Big bidders built a track record of handling big contracts, despite the wafer-thin or negative margins, leading to further bid wins. Ms O’Leary puts it this way: “Large companies had most evidence of past projects, which were given highest weighting in the assessment model. Many of these had to be in the last five years, so only organisations that had chosen to make a loss and taken jobs then had the case studies to prove their suitability for future ones. This then squeezed more and more contractors out of the supply chain.” It was a recipe for disaster. 

A second glitch in the matrix came from the evaluations used by councils. Helen Randall, partner at law firm Trowers Hamlins, helped negotiate contracts with Carillion and other major public sector contractors. She says the quality component was underrated. “Most PFI [private finance initiative] contracts were evaluated on a 60 per cent quality, 40 per cent price basis. However, experience has shown that if a public authority applies an evaluation ratio where price represents anything more than 30 per cent, then inevitably price will always trump quality,” says Ms Randall. 

Another problem is that falling budgets led to falling expertise. Paul Dossett, head of local government for Grant Thornton UK, saw this at first hand. “Headcount reduction due to prolonged austerity has led to many councils not having the necessary in-house expertise to effectively draw up contracts and procure suppliers, or the capacity and capability to undertake the correct due diligence and effectively monitor contracts once they have been let,” he says. 

His view is supported by Ms Randall. “As someone who has worked in both the public and private sectors, I can see both sides of the picture, but many civil servants haven’t had enough exposure to the business world so they don’t understand how a bid is put together,” she says. “I’m a strong advocate of seconding civil servants into the commercial sector so they can understand how profit is calculated and why you need contracts that will allow contractors to make a profit to stay afloat.” 

In theory, the CCS should swoop in to help beleaguered public entities. But it failed to notice the problems at Carillion. And it arguably failed in its primary duty to help state bodies negotiate viable deals with the company. Worse, claims James Bousher, manager at consultancy group Ayming, the CCS strategy for helping is flawed. 

“The CCS attempts to do this through maintaining their strategic supplier list, but it only contains around 30 suppliers and their impact doesn’t reach far beyond central government,” says Mr Bousher. “There’s no clear path, or necessarily even expectation, for a devolved contracting authority to raise concerns as a warning to the wider public sector. Even then, once bad contracts are identified, the real challenge is working out what to do with them.” 

While we tend to only hear about failing outsourcers and failing councils, in reality the majority of councils are well run and most outsourcing contracts deliver what was promised

Other helpful tools are underused. Open book costing, where margins are agreed with the buyer, are promising, but not routine. The British Standard on collaboration (BS 11000) has a poor take-up. In theory, it should help contracts be shared between multiple parties, removing the “winner takes all” problem of today. 

In the final analysis, it is worth remembering that most public sector contracts work well. As Mr Dossett of Grant Thornton puts it: “While we tend to only hear about failing outsourcers and failing councils, in reality the majority of councils are well run and most outsourcing contracts deliver what was promised.” 

Carillion should not undermine the role of outsourcing in the public sector. An ecosystem of outsourcers can supply agility, technical expertise, focus and a motivated workforce. But the landscape must change. Mid-sized bidders must thrive. Contracts must include larger provision for quality. The public sector must foster talent, experienced in deal-making and the CCS is critical in that mission. 

Above all, the public sector must learn that outsource partners can’t live on below 3 per cent margins. Cheap does not equal good. If Carillion offers one lasting lesson, let it be that one.