The practice of 'farming out' government work began about the time when people were being replaced by 'new technology'.
In order to justify spending loads-o'-money on computer systems, governments had to demonstrate that they could make drastic staff cuts/salary costs.
Rather than train their own staff in the introduction of computer systems, it seemed more prudent to employ 'specialists' in the short term.
Those specialists often 'cocked up' the system - causing the need for more 'specialists' to sort out the mess.
So using 'specialists' became the normal practice.
The government could say that the civil service had been drastically pruned, which seemed to go down well with populace, didn't it?
When I 'escaped' the civil service in 1994, the 'privatisation' of many aspects of the service was well under way.
The last job I did went private the year after I left. Outside firms are now in charge of the day to day maintenence and smooth running of government buidings. From comments made to me by my former colleagues, they don't seem to be any good at it.
But there are fewer bodies on the payroll and fewer due a pension, which goes down well with the public doesn't it.