had managed to miss that story
that's quite unusual - tory policy with outsourcing balls-ups tends to be to give the shit companies more money to sort it out / new contracts to do other stuff because taking contracts away from them would make it look like they had made a bad decision in the first place...
while i suppose i'd better not go in to detail, but i have a friend who must be in to the fourth year of what should have been a 6 month project doing something in the outsourced IT for public sector.
i don't know the NHS well enough to offer much of an informed opinion - the public sector in general is not wholly like the stereotypes peddled by the tory tabloids, and in much of it, there's an ever growing heap of targets and 'performance' measures (sometimes stuff that's simple to count rather than anything that actually measures performance), and regular pressure to do more each year with a smaller budget and in many cases a smaller number of people.
In theory at least, the public sector fills vacancies on application / interview on an equal opportunities basis, rather than selecting people on whatever basis the manager feels like that week. Some parts can have a 'fast track' scheme for graduates, which can in practice mean everyone else is on the 'slow track' if not in a siding.
I am led to believe that it's easier to get a job within the NHS if you're already in (knowledge of their systems / procedures and so on) so this particular role needn't be a dead end (obviously you know more about this particular area of work than i do) - public sector in general tends to have a policy of advertising all jobs externally, although at a time when redundancies are in the air, they will often give a chance for 'at risk of redundancy' staff first.
Another angle is which job would be best for you if / when you move on next? which will give you experience that's going to be good in the future if you want to / have to move on? I'd have thought that some NHS IT stuff is kinda specialised and may not be used much elsewhere?
Some public sector organisations (again, I don't know the NHS well enough to comment) keep obsolete software on for years because they can't afford to update every bit of bespoke software they have got, and this essential program will only work with an ancient version of internet explorer...
dunno really.
hope you're in a position where you do have a choice to make soon.