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By | Kable 19th November 2010 11:09

DWP spreads IT spending around

Proportionately less work dished out to two biggest suppliers

Figures for May to September of this year appear to show the Department for Work and Pensions giving proportionately less work to its two largest suppliers.

Spending data published by the government on 19 November shows it spent £224.3m with HP during the five month period, its main IT partner and second largest supplier of any kind. BT received £51.8m over the same period.

The figures indicate the department may be spending less with the two firms, with monthly average expenditure with BT of £9.8m from May to September of this year. Data released under Freedom of Information for the 2009-10 financial year showed the department spending an average of £19.4m each month.

Similarly, the department's monthly average spending with HP was £44.8m in May to September of this year, compared with £54.7m for all of 2009-10.

"Not withstanding the fact that that the information is not for a full year, that 20% of total expenditure noted goes through IT vendors outside of HP supports our view that the DWP is increasingly looking to expand the use of alternative providers and is not shy of looking outside the TREDSS agreements to meet demand," said Christopher Pennell, principal analyst at Kable, referring to the department's Transforming EDS Services agreement with EDS, now part of HP.

"It is unlikely that HP can do much to stem this tide in the long term, as such the retention of the system integration and management (SIAM) business will be of heightened importance to HP as this will enable it to retain that pivotal role of acting as the main channel between DWP and the supplier community."

A spokesperson for the department told GC News that because the data only covers five months of this year they are not definitive. "The reason the figures look so different is because last year's spending is next to figures from May to September of this year, so it doesn't include the month of April before the new government came in. There were still a lot of payments made in the month of April."

She added that the numbers from this year include just recoverable VAT, while the figures for 2009-10 included VAT on all figures.

May-September 2010 top 100 suppliers to DWP

This article was originally published at Kable.

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