News that the British government has wasted well over $2 billion on cancelled or failed IT projects since the turn of the century – not including the cost of the abandoned crime-reporting portal in early January – makes for depressing reading as we set foot into a challenging year for the outsourcing industry.

Arguably, that cost of failure represents only a small percentage of the government's $14 billion annual IT spend, as calculated by Joe Harley, programme and systems delivery officer at the Department of Work and Pensions. However, the same Mr Harley is on record as having said (according to The Guardian, 5th January 2008) that "only 30% of our projects and programmes are successful. It is not sustainable for us as a government to continue to spend at these levels."

In a recession, that would be doubly true – $14 billion could be invested in failing schools, to help pensioners meet the cost of rising fuel bills, or to top up ailing pension schemes – but it also begs the question what other large-scale projects might be on the brink of failure if only $4.2 billion is invested successfully each year, and the balance of that $14 billion is wasted money. Perhaps Mr Harley was including overdue and over-budget schemes as 'failed' – those that may not have failed technologically, yet, but which have certainly failed the taxpayer?

Either way, this forms only part of the issue I want to share with you this week. The other element concerns news that the British government has been working covertly with the FBI on a proposed data-sharing scheme to give US intelligence access to personal data on UK citizens, and to track people moving across Europe and using the UK as a platform for jumping continent over the Atlantic (software pioneers and rock stars, perhaps?). This is the same government, remember, that loses data on 25 million households in the post.

The issue is not that any of this is surprising – we live in fearful times and in slow-moving bureaucracies, and both make for healthy software sales – but whether or not government is approaching IT from an outmoded standpoint: that of the 1990s marketing executive.

In the narrowband, client/server 1990s, intellectual property (data with commercial value, or monetised ideas) was king; you gathered it from willing or careless customers and, safe in the belief that it was yours (because you gathered it or patented it), you flogged it to the highest bidder.

Everything in the government's approach to technology suggests this is what they are doing: they believe any data they gather about citizens is the government's property, however personal or accurate the data may be, simply because the government gathered it. But the government is not an advertising agency or a supermarket monitoring shopping habits. It is in the employ of its citizens, and is elected to protect them – and not from themselves.

The truth of the matter is that it's likely that the government is gathering not the raw material to create services, but rather an intellectual asset they can sell and resell. Indeed, evidence suggests they also intend to use personal data as a means to save money by withdrawing services from named individuals rather than providing those services to one and all.

Witness the creep of Citizen Relationship Marketing programmes across the UK, whereby boroughs target named named individuals and withhold benefits from them because they have not parked their cars correctly, for example, or emptied their bins. This has gone unnoticed by the national press, but it is a quietly unfolding scandal – and like all such democratic travesties, it wears a polite and reasonable face.

I believe this way of approaching personal data and public technology programmes is nothing more than witless and authoritarian; it's a 'because we can' philosophy. And with every small step we move further and further away from the kind of society that most of us want to live in; even those of us who sell the enabling technology. Such data is already shared across local county boundaries; clearly it will also be shared across national ones too, if the US gets its way.

The government's zeal for large-scale implementations fails in the real world because it is rooted in the politics of the 1990s marketing team, not of forward-thinking government; it's all about the hard sell and the hard bargain, with scant regard for veracity, privacy, or sophistication. It has little to do with enlightened modernity; it's merely a blunt instrument.

You can picture Whitehall mandarins itching to find a legal way to identify obese people and smokers and to begin withdrawing services and benefits from them, or increase their national insurance contributions, or force them to do physical work in the community. Why would it not happen?

So why use an outsourcing forum such as this to lambast politicians for their approach to large-scale IT programmes?

One, clearly because they have a bleak record of implementing them and wasting staggering amounts of public money in misconceived tilts at modernity (good for our industry, but only in a world of 'me, me, me', rather than the meme-world of the networked century); and two, because much cleverer enterprises than this government – and it is now an enterprise, have no doubt – have realised that sucessful technology programmes are no longer merely about IP and vast data repositories.

The real opportunities lie in allowing people to connect with each other in new, innovative, and self-selecting ways, and provide services to people who need them. High-street names recognise this; social networking sites have grown wealthy on this simple idea. The fact remains that people form much more stable communities when they are allowed to connect freely and share, than when their every move is logged by a bureaucrat solely from the point of view of being a floggable commercial asset.

Alas, even terrorists understand this better than the government – and you don't tackle issues such as that by trying to reverse the process. The twenty-first century experience shows that technology's great contribution to society is that it connects and mobilises, and will route around any obstacle that stands in the way of communication.

On the rare occasions the government does 'get' this fact, the projects it kickstarts are woefully misconceived, because no one asks the big question: why? For example, why would most people use the Internet to report a crime? If you witness a burglary or a violent assault, your first thought is not 'I must log onto the internet, track down that government website, and spend an unpredictable amount of time grappling with the interface and my browser before typing in the details'. No, you think: 'Dial 999'. If someone had said 'why?', then the online crime reporting site would not have wasted so much of our money.

The challenge for outsourcing providers and their customers in 2008 is to recognise how and why some enterprises have become so successful by facilitating the network – and the network effect – and why other organisations are mired in expensive, slow, old-economy projects, at least partly because they believe there is money to be made once all those billions of pounds have been emptied down the drain in the public's name.

Prove it!