Brexit ‘Forces’ Government To Automatically Renew Massive IT Contracts

The government is set to automatically renew hundreds of contracts with the private sector due to a capacity shortage caused in part by the diversion of resources to handle Britain’s exit from the European Union.

An unnamed procurement adviser to the government told the Financial Times more than 250 contracts were expiring during the 2016-2017 financial year, with many were being extended or re-extended because “Brexit has pushed them down the list of priorities”.

Staff crunch

The extension of contracts, including large IT or business process outsourcing deals, is also occurring due to austerity measures introduced since the financial crisis, which have cut the number of civil servants by 26 percent over the past decade without any cuts to the services being provided, according to the National Audit Office (NAO).

The government’s largest technology contract, the Treasury’s deal with Capgemini and subcontractors Accenture and Fujitsu to collect tax and VAT returns, may need to be extended.

The deal, which cost £7.9 billion from July 2004 to March 2014, has already been extended once, and HM Revenue & Customs said it is on track with a phased exit planned to conclude by June of this year.

But the NAO said last year an extension was likely and would see HMRC paying more than it should due to the lack of competitive pressure.

‘Better prioritisation needed’

Last month the NAO said the EU exit, on top of austerity measures, had resulted in “urgent” skills shortages for the civil service, with the expertise needed for increasingly ambitious digital projects particularly hard to come by.

The decision to leave the EU alone has been called ‘the biggest, most complex challenge facing the civil service in our peacetime history’ by the Cabinet Secretary, and means changes for most government departments, as well as the creation of two new departments, the NAO said.

It noted that as of February this year the civil service had created more than one thousand new roles in the new deparments to prepare for exiting the EU and negotiating new trade agreements, with two-thirds of the roles currently having been filled.

The NAO said in the short term the government needed to improve its planning and prioritisation.

The government said it is focussed on bringing in staff and skills to ensure the best outcome from the EU exit negotiations.

“The government is focused on delivering our commitment to leave the EU and getting the very best deal for the UK, and we are equipping ourselves with the right people and the right skills across government to make this happen,” the Cabinet Office stated.

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