Channel hits out at wasted government IT spend
Public sector suppliers urge Whitehall to drastically change its IT procurement policy sooner rather than later
Industry onlookers have expressed their disgust at the amount of money central government is spending on its IT, and agree that the entire procurement system needs an urgent overhaul.
Last week, a public administration committee made up of MPs released a damning report entitled Government and IT - A Recipe for Rip-Offs: Time for a New Approach, which revealed that 80 per cent of central government IT work is undertaken by just 18 suppliers, and accused Whitehall of wasting an "obscene" amount of money, giving some IT suppliers a dangerous monopoly and ignoring smaller IT suppliers.
The report also said that many contracts are "too complex" to manage, with "too much power and money [committed] to a single supplier".
It recommended that the government commissions an "independent, external investigation to determine whether there is substance to claims of anti-competitive behaviour and collusion among suppliers". It also said contract sizes should be reduced to enable smaller suppliers to get their foot in the door.
The most shocking figure revealed by the report was that the Cabinet Office spent an average of £3,664 per desktop for each full-time employee, with the average spend per government desktop hitting £2,300 - up to 10 times the price paid in the private sector.
Findings in the report contrast harshly with prime minister David Cameron's wish to involve more SMB suppliers in the contract bidding process.
SMB suppliers interviewed by the committee said they were dropped after award of contract, although they had been involved in some bidding processes with larger SIs, and allowed to "demonstrate innovation". They added that government departments often refused to deal with them directly.
However, Bordan Tkachuk, chief executive of Viglen, believed the government is sincere in its determination to change the system.
"There is no question that the government has been ripped off by the larger service providers, but this is going to change. It has to. The government needs to look at aggregated purchases to get economies of scale.
"At the moment, according to those figures, government is spending an average of £2,500 per PC, meaning one PC can cost £7,500 during its lifespan - and that is at the lower end of the scale. We could supply the same spec PC for £600, with a £200 annual service charge. Quite a difference."
Shaune Parsons, managing director of Computerworld Wales, said: "I am absolutely disgusted by the figures. The people spending that sort of money should be out of a job. Spending £3,500 on a PC is ridiculous and the government has to wake up and start running its departments like proper businesses. Somebody needs to get a grip on this and fast."
Andrew Gilbert, managing director of Node4, said SMBs should be give more of a chance.
"The government needs to urgently review the tendering process for public sector contracts to allow a level playing field for SMBs to compete - an initiative that could save millions of pounds and dramatically improve the quality of IT services supplied as a result of the increased competition," he added.