For me, the single over riding point is:
When something goes wrong - you need to be able to reach out and grab the responsible person warmly by the throat.
If they are an outsourcing company - you cannot do that. You cannot punish/demote/ etc. the person who made the mistake. The outsourcing staff know that and they do not answer to you, no matter what 'reporting lines' are put in place.
I recall in the late 1980s when I was working in The City. We (an American Merchant Bank) begged a certain well known telecomms company to give us a project manager who could actually do the job, rather than the twit they gave us. They replied, "Sorry, he's the best we've got". It may simply have been that their best was already tied down by another client but WE had no influence. That was the moment I realised outsourcing was not going to work and it was, either, 1989 or 1990.
So, when I saw the tories (enthusiastically followed by the Labour) using outsourcing - I knew it would not work. I suggest that it has not.