The Government's over-reliance on large contractors for its IT needs combined with a lack of in-house skills is a "recipe for rip-offs" according to a report by the Public Administration Select Committee (PASC).
The committee found that as a result IT procurement too often resulted in late, over budget IT systems that are not fit for purpose.
Bernard Jenkin, Chair of PASC said:
"We heard truly worrying accounts about the amount of money successive Governments have wasted on failed IT projects. According to some sources the Government pays between seven and ten times more than the standard commercial rate for its work: however the Government does not collect the information needed to verify these claims."
One of the report's recurring themes is the dominance of Government IT by a small number of large companies.
Bernard Jenkin commented:
"The Government has said that it is overly reliant on an "oligopoly" of suppliers; some witnesses went further and described the situation as a 'cartel.' Whatever we call the situation it has led to an inexcusable situation that sees governments waste an obscene amount of public money."
Breaking out of the relationship
The report argues that the Government needs to do four things to break out of this relationship:
- Improve the information it holds on IT expenditure, without which the Government is unable to secure the best possible price for goods and services.
- Publish more information about IT projects. The committee argues that the Government should make public information about how much its IT costs, and how its systems run. This would allow external experts to challenge current practices and identify ways services could be delivered differently as well as more economically.
- Widen the supplier base by reducing the size of its contracts and greatly simplifying the procurement process to engage with innovative Small and medium enterprises (SMEs). Most importantly, departments need the capacity to deal directly with a wider range of suppliers, especially SMEs.
- Work in a more "agile" manner. The Government needs to move towards the use of more iterative development methods which enable IT programmes to adapt to ever changing challenges.
Bernard Jenkin, Chair of the committee said:
"To address these challenges successfully the Government needs to possess the necessary skills and knowledge in-house, to manage suppliers and understand the potential IT has to transform the services it delivers. Currently the outsourcing of the government’s whole IT service means that many civil service staff, along with their knowledge, skills, networks and infrastructure have been transferred to suppliers. The Government needs to rebuild this capacity urgently.
This Government, like many before it, has set out an ambitious programme aimed at reforming how it uses IT. We are greatly encouraged by the Government’s plans, and we promote a number of solutions which can transform how we deliver public services online.
We will need to wait and see whether it can make progress in an area that has resisted so many previous attempts at reform."