MPs urge government to address IT supplier oligopoly

The government must address its IT supplier oligopoly, according to the Public Administration Select Committee (PASC)

The government is making progress with its ICT strategy but must address the IT supplier ‘oligopoly’, according to the Public Administration Select Committee (PASC).

The PASC report follows the government’s response to the committee’s recommendations in its Government and IT report in July. The PASC described large IT suppliers as holding an "oligopoly" on government procurement.

“The government appears to have maintained this initial momentum in implementing its IT strategy,” said the PASC. “We commend the government for its generally constructive and proactive response to our report,” it added.

In its response to the PASC report in July, the PASC said the government explicitly agreed with two-thirds of the committee’s recommendations. “However, this also serves to highlight those areas where the government’s response fails to engage with some of our recommendations, particularly around benchmarking, legacy systems and capacity/capability gaps,” it said.

The committee said it was disappointed the government had not responded to its recommendation to establish an independent external investigation. The PASC had recommended an external body to investigate if large suppliers had behaved in an anti-competitive and collusive manner.

In its response to the question of supplier oligopoly, the government said: “Extremely serious allegations have been made about the behaviour of some large suppliers. There are clearly very strong feelings on both sides of this debate. We are not in a position to come to a firm verdict on this matter.”

The report also questioned the position of the Cabinet Office to drive IT transformation. “It is not itself a large IT-using department and historically it had struggled to drive change within those departments with long-standing and deeply embedded relationships with large suppliers.”

The PASC said it was not clear from the government’s response that its actions will be adequate to cope with the scale of behavioural and process change required across the whole of government, nor that the agile "champions" will have sufficient seniority, expertise or support.

It also said there were areas where the government could go further and move faster to implement digital by default.

The report comes just days after the announcement that Andy Nelson had been appointed government CIO, replacing current CIO, Joe Harley, when he retires in March.

Tom Gash, director of the Institute for Government, said it supported the move to review existing procurement practices to ensure they do not exclude agile ICT projects or block SMEs from competing for contracts. 

But he said the PASC should have highlighted the need to ensure strong cross-government leadership for ICT strategy implementation: “We are concerned that the new government CIO may not be sufficiently empowered to provide a strong, independent view and to influence the decisions of the wider civil service leadership.”

The government responded to the report: “Government welcomes the committee’s interest in and support for government information and communication technology. ICT is vital for the delivery of efficient, cost-effective public services which are responsive to the needs of citizens and businesses,” it said.


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