When it comes to cutting expenses, government institutions are always very interested, so it makes sense to outsource all sorts of things.

On paper, sort of. Government IT projects are often seen as cash machines by private businesses where I'm from because there is often a generous budget and government institutions tend to want to use those budgets completely because if they don't, some will start wondering if they really need that much budget or if it maybe can be shortened a bit.. There have been notorious cases where there were huge projects that ended up being even more expensive than initially planned because the private contractors just milked it. And there is of course a lot of mutual masturbation between government institutions and big tech.

And government institutions tend to follow the private sector. The private sector has been pushing to the cloud for a long time now to the point where virtually nobody is suggesting or providing support for on-premise solutions. When every IT contractors says that moving everything to the google/microsoft cloud is the state of the art (and that there are 0 downsides to it and everything is 100% secure), most will not question it.

some countries have decided that all of mining industry, railways, electricity and water must be kept in government hands, no matter the cost. Same sort of things can happen with IT services once you burn your fingers badly enough.

Recently there has been somewhat of a push for open source solutions and big tech independent solutions for government institutions as they start to notice the downsides and potential security risks. And I mean it's absolutely ridiculous, there are entire IT projects where entire systems and solutions were developed to provide a secure software solution for the military (costing hundreds of millions), but then they want to share those files with sharepoint online..