The government has moved to cap all future IT deals at £100m as part of a range of new measures designed to ensure taxpayers get the best deal from public sector IT.
Today minister for the Cabinet Office Francis Maude (pcitured) set out his "red line" measures and promised to be "unashamedly militant" about policing them.
From now on, no IT contract will be allowed to surpass the £100m mark unless there is an exceptional reason to do so, and new hosting contracts will be capped at a two-year maximum as well.
Companies with a service contract will no longer be able to provide systems integration in the same part of government, and no automatic contract extensions will be granted unless there is a compelling case.
The government said the so-called red lines have been put in place to "free [it] from longstanding inflexible contracts" with IT providers.
Public sector IT contracts have come under fire in the last few months: the National Programme for IT (NPFIT) was slammed by the Public Accounts Committee which claims the taxpayer is still footing the bill for the "ill-fated" scheme. More recently, the Ministry of Defence was forced to admit it needed to shell out around an extra £50m to fix technical problems with its Army recruitment IT portal.
The government insists the red line measures will ensure better, more cost-effective procurement.
"Big IT and big failure have stalked government for too long; that is why this government is radically rethinking the way it does business," said Francis Maude.
"We are creating a more competitive and open market for technology that opens up opportunity for big and small firms.
"These red lines will ensure the government gets the best technology at the best price and we will be unashamedly militant about enforcing them to provide value for hard-working taxpayers."
The government insists that in 2012/2013 alone, some £3.8bn of savings has been realised due to smarter purchasing on top of a further £500m in savings derived from tightening its grip on IT spending.
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