Lion's share of IT contract spend is taken by four government departments


Lion's share of IT contract spend is taken by four government departments

Kathleen Hall

About 80% of the government's spend on IT contracts comes from just four departments, according to research by Computer Weekly.

Of nearly £16bn spent on IT projects currently underway, the Department for Work and Pensions (DWP) spends the most, with £4bn locked into IT contracts, followed by the Home Office (£3.9bn), the Department of Health (£3.5bn) and the Cabinet Office (£1.5bn).


The DWP's Enabling Retirement Savings Programme (ERSP) project alone costs £1.88bn, according to a list of about 150 ICT contracts worth more than £1m. The department's annual IT budget is about £1bn.

Clive Longbottom, director at analyst Quocirca, said he was not surprised by the figures. "These departments have gone for really big projects and are the ones where it's often been patently obvious that projects have not worked," he said. "I don't begrudge the amount, but the way it's being spent. The public sector seems to really love big projects."

Sarah Burnett, analyst at Ovum, said the IT spend breakdown was a reflection of the departments' size: "The DWP is the government's biggest department, but the trouble is it has a lot of legacy systems for things that matter for integrating and making IT efficient. The Home Office is another huge department, with a large remit."

But overall contract values have already started coming down across government departments, added Burnett. "Our analysis of 2010 showed a step-change in contract values. We are going to see much smaller projects," she said.

IT contract spend by government department

  • Department for Work and Pensions: £4bn
  • Home Office: £3.9bn
  • Department of Health: £3.5bn
  • Cabinet Office: £1.5bn
  • Ministry of Defence: £0.9bn
  • Foreign & Commonwealth Office: £0.7bn
  • Department for Environment, Food and Rural Affairs: £0.5bn
  • Department for Transport: £0.4bn
  • HM Revenue & Customs: £0.2bn
  • Office for National Statistics: £0.04bn

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