Does UK Government Dare To End the Rip Offs?

A parliamentary report has revealed “obscene” overspending on IT within government departments. But will it really be possible to undo the oligopoly that has been revealed?

The Public Administration Select Committee (PASC) report made no bones about what it found, and its title, “A recipe for rip-offs” was clearly designed to attract the kind of media attention it has received. For years we in the IT sector have known all about waste in public sector IT spending, but have felt powerless. What could we do about it?

A national scandal?

Now the issue has reached levels of scandal where the Daily Mail‘s outrage has been provoked, because the PASC – a non-partisan group of MPs – has done what it should do. It has got the facts, and found telling examples – such as the £3,500 computers which were bought instead of ones costing a tenth of the price.

But, as with previous scandals, such as the banking crisis, and News International’s phone hacking, the question is, will anything actually be changed? In this case, there are reasons why it will be very difficult to really alter things.

Firstly, the government is seriously tied into the oligopoly system, where a list of suppliers owns its business. It set up a programme of cuts which it claims reduced its IT bills by £1 billion (on a total spend which could be as much as £20 billion).  But that programme of cuts is based on squeezing the existing system – applying pressure to the existing suppliers and getting them to cut their margins a little.

That process might simply prolong the old system – because those oh-so-grudging cuts (sometimes against theoretical costs for this year) will be made in exchange for new contracts which could be hard to get out of.

Meanwhile, it is not at all clear whether the government has the ability to really act on its strategy of moving towards smaller suppliers. Civil servants have apparently lost the ability to think – in a extreme case of de-skilling. How else would they pay ten times as much of our money for a laptop, as they would on one for themselves?

Because it asked the industry to do its thinking for it, government deserved what it got.

But how can it change? Government should be more agile, and it should use more SMEs. but using more SMEs on its own is not enough – there were plenty of SMEs and contractors involved in the titanic schemes which have been exposed here.

The problem was that those SMEs were managed by large systems integrators (SIs), who had absolutely no incentive to keep costs down. The old system, effectively asked wolves to watch the sheep.

More effort needed

The only alternative is for people within government to manage better. To have more facts, and more understanding. In a nutshell, more power – and as we know from the comic books, with great power comes great responsibility.

To manage those smaller suppliers properly will need more effort. This objection is already being over-played by those who don’t want the current system to change. It’s a real objection, but not an insurmountable one.

But it does seem that managing more granular contracts would mean increasing the staffing and the effort involved in organising and supervising contracts.

Ironically, on some level, it must mean “bigger” government, something to which this administration has never signed up.

But we have to go beyond understanding the problem, to make real change.

“The increase in understanding is a booby prize,” says one of the people who PASC consulted, open source leader Mark Taylor. “We know there is a cartel behind it, and we think more suppliers should be given the opportunity. It is no good increasing our understanding, if nothing changes.”