It is time for new IT suppliers for government

The report from the Public Administration Select Committee into government IT pulls no punches, with its theme of an oligopoly of giant system integrators, says government SME advisor Mark Taylor.

The report on the Public Administration Select Committee (PASC) inquiry into government IT pulls no punches. The theme of an oligopoly of giant system integrators ruling the roost runs through the report all the way, in fact you could summarise the 65 pages like this:

  • Government IT is ill-conceived, rarely works as planned, and costs far too much taxpayer money.
  • The cause is an entrenched oligopoly exploiting poorly informed, dimly comprehending and half-asleep civil servants.
  • The solution is:
    1. Smarter procurement - government needs to become a smarter and better informed buyer;
    2. Transparency and openness - open standards, open source, open data;
    3. Open up the market, break the oligopoly, bring in the SMEs.

The theme of innovative new SME players being the solution runs through the report as the counterpoint to the oligopoly of major suppliers with their entrenched practices being the problem. Much of this would be obvious to a first year economics student, but after more than a decade's centralisation around "preferred suppliers" with cosy relationships with government departments, it has taken a committee of the standing of the PASC to bring this state of affairs to light.

The call for an investigation into the "cartel" caught my attention, and is something I wholeheartedly support. I have experienced, shall we say, "sharp" practices from members of the oligopoly ranging from being made to wait half a year for payment, to being wheeled in to win a contract - open source magic pixie dust - then being summarily kicked off once the ink dries on the contract for them. I was present at the PASC inquiry SME day and witnessed the fear of coming forward with the truth first hand - fear of reprisals and fear of being denied the tiny crumbs from the oligopolists' table.

There should be an investigation into the public sector IT oligopoly and appropriate remedies handed out if the allegations prove true.

Even more importantly the government must act at last, break the oligopoly and open up the market in the way it has promised. Initiatives like those brought by the Cabinet Office - such as innovation launchpad, Contracts Finder, SME Panel, and departmental business plans - are a great start, but the entrenched interests must be confronted and the existing procurement regime dismantled - it is rotten.

One of my biggest concerns is the implicit tension between Philip Green's report into government purchasing last year, with its emphasis on centralisation and squeezing the supply chain, and the recommendations from PASC about relying heavily on new suppliers to government. It is not clear to me that the two can be reconciled. Focusing on squeezing out costs from an existing system may make the existing system more efficient and cost less, but will not fix the obviously broken system brought to light by the PASC report, and will most likely drive government IT further into the hands of the very oligopoly that gave rise to this mess in the first place. Innovative new suppliers and a sea-change in government IT practice, or some short-term cost savings from squeezing the supply-chain - the government must decide which.

If the PASC report simply serves to increase our understanding of the problem, it will have failed. I do not believe this will be the case, the report is well researched, well written, and lays bare the state of affairs that current stands for all to see. Amazingly, it really looks as if this obscure, even esoteric, subject is getting the attention it deserves - the press has gone far and wide, from tabloids to broadsheets, from Bristol to Bangkok. In a world where MPs' expense claims and breaking into mobile phones can command public attention and lead to positive change, the squandering of nearly £20bn each and every year has reached the light of day and has a real chance of leading to positive change too.

I consider the PASC report a very useful piece of ordnance for my New Suppliers to Government working group, and we will be pushing for exactly what the Cabinet Office has called us - new suppliers to government. it is fairly clear that the old suppliers to government are not doing the job the taxpayer needs them to do.

Mark Taylor leads the Cabinet Office "New Suppliers to Government" working group, and is chief executive of open source specialist Sirius. You can follow him on Twitter as @Mark_Antony.

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