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By | Kat Hall 29th April 2016 12:19

Central gov spent £6.3bn on IT. Nearly half handed to just 3 suppliers

HP still on top with £1.2bn spend in 2014/15

Central government splashed £6.3bn with IT suppliers for the year 2014/15 – with 42 per cent going to just three suppliers, according to government data shared with The Register.

Sixty-five per cent of the total figure was hoovered up by 10 suppliers, with HP coming top at £1.2bn, followed by Capgemini at £861m, and BT at £561m - according to an analysis of Cabinet Office data from the National Audit Office.

All the other usual suspects remained on the list, including IBM (£290m), Atos (£235m), Fujitsu (£190m), Steria (£166m), CGI (£145m), and CSC (£129m).

Less familiar was Paradigm Services, which appears to have a number of contracts with the Ministry of Defence and won £295m of government IT contracts.

The findings indicate that not much has changed in terms of the overall distribution of IT spend since former Cabinet Office minister Francis Maude first promised to take on the supplier oligopoly back in 2011.

Since then a number of big IT contracts have been extended, such as the Department for Work and Pensions' (DWP) three-year extension of its 13-year £2.5bn desktop services contract with HP last year.

That appears to be a tactic on the part of departments to buy time while they scratch their heads and work out how to break up their mega deals - as mandated by the Cabinet Office.

However, it looks like Capgemini and Fujitsu will lose some of their share of government IT spend next year, as HMRC begins breaking up its mega £10bn Aspire contract next year. Both suppliers have already won a number of new government deals, however.

The figures, which are not usually in the public domain, were first alluded to at a Public Accounts Committee last month.

John Manzoni, chief exec of the civil service, said the stats are like they are because they are still only in the early stages of disaggregating the big monolithic IT contracts that have been a part of the landscape for a decade.

"Some of the very big suppliers... what is happening today in HMRC with the Aspire contract is an example. It’s happening in DWP, which is now coming up to the same stage. We can address them only as they come up for expiry, because it’s at that point that we can disaggregate them and re-contract them in a different way."

He said in six to 12 months’ time, the Cabinet Office will be better placed to answer the question as to how spend will be distributed in the future.

They figures are derived from departments self-reporting IT spend. However, they do not reflect the full picture of central government IT spend as not all department's arms length bodies report spend. ®

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