While there is no definite figure for how much Government spends on IT, current estimates put the figure somewhere between £16bn and £20bn. Accountancy firm Deloitte categorises this spend as â??heavy investment, not delivering results.â?�

Despite the UK spending more per capita on IT than the US, Germany, France and several other comparable nations, IT-enabled government service delivery continues to be blighted by the costly failure of new projects and low take-up of existing services – despite a high level of availability.

Government does not have the luxury of starting afresh and must tackle a hardware and software infrastructure that has grown in size and complexity for decades. Yet equally there is no reason why this should be allowed to justify the poor track record of many Government ICT programmes.

Indeed, the current savings targets of 30% identified in the Read report would still leave the UK with a below-average return on its IT investment, and as a taxpayer I cannot comprehend why we are happy with being below average. The delivery of public services is at risk if the status quo continues.

 

The status-quo is a straightjacket

Government, since the days of Haldane, has approached public services from a soloed, department-led position. Services have been procured in their entirety, with one prime contractor often responsible for the end-to-end solution. As IT has begun to automate administrative functions, little has been done to bring in new, horizontal procurement where re-use is the driving force of procurement.

A major obstacle to moving to this world of truly shared services and purchasing for re-use is that Government has become reliant on a small, dominant group of suppliers. A group of academics from UCL and LSE, led by Professor Patrick Dunleavy, went so far as to warn Government that IT/industry relations have become “dangerously unbalanced.” This vested interest, often masquerading as best practice, is a straightjacket on Government. However, the wider implication is a chilling effect on the UK’s entire IT industry.

The emergence of this small, dominant incumbent supplier group – arguably an oligarchy - has been perpetuated by the risk-aversion towards any organisation without a balance sheet worth hundreds of millions of pounds. They are deemed ‘risky’ as they would not have the finances to cover the cost of any damages that would be sought in the event of project failure. Yet this myth – and it is a myth – is based upon the presumption that Government will indeed litigate against suppliers, something which rarely happens.

The one effect of this myth is to give prime contractors a justification for allowing the status quo to continue and to tie up those civil servants who are looking for new ways of working. Alternative ways of working and technological innovations are rarely seen by civil servants, blocked by the gate-keeper incumbents to protect revenue streams.

Serve the citizen, not the supply chain.

A wider issue is the role of prime contractors in managing the entire supply chain necessary for service delivery – and the attitude of incumbents that this is the only option. When they are pressed to deliver savings, too often the pressure has been borne by those lower in the supply chain – inevitably small and medium size businesses which cannot risk losing a vital revenue stream. The prime contractors have maintained their own margins while in some cases putting sub contractors in the supply chain below them out of business. This cannot be allowed to continue.

Yet In serving the citizen, better value can be achieved by moving to a world of shared services and supply chain professionalism. The services can still be provided by large businesses, but also specialist organisations who focus on delivering a specific granular process, for example payroll or e-mail provision. Historically Government has been poor at purchasing for re-use horizontally across departments, with huge duplication and unnecessary complexity the inevitable result. This has been hampered by the belief that Government, and indeed individual departments, are unique entities and as a result often opt for custom-built systems, rather than commercially available options or systems in use by other departments.

 

By driving supply chain professionalism and allowing everyone to make a margin, the tax-take and levels of corporate investment into innovation will benefit.  Savings can be made, but through continuous improvement and not top-down squeezes. Embracing the innovations currently blocked will become a competitive advantage for prime contractors and the whole UK economy will benefit as a result.  


Government must take a lead in addressing the long-term questions facing IT systems, working within ever-tightening budgets. From building open standards into contracts, preventing lock-in, to vigorously enforcing service level agreements (SLAs), the private sector has demonstrated that it is possible to have a forward-thinking IT strategy that delivers new services while maintaining continued performance. The key is purchasing for re-use and ensuring maximum value from every investment across government, not just within a department.

The potential to achieve a step-change is real and within our grasp, but there are many who want this endeavour to fail. The challenge for all political parties is whether they have the will to succeed, or talk of change is merely rhetoric to be lost in the post-election mire.