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By | Kat Hall 28th September 2016 08:27 is doing sod all to break £20bn of locked-in IT contracts

At least one department has no idea how much it's splurged

Analysis If IT wasn't perceived to be such a boring topic by Joe Public, the amount the government still spends on expensive clunky technology would be viewed as a national scandal.

Across the entire public sector the annual figure has been pegged at around £20bn. No one knows for sure.

As long as Whitehall's money is locked into costly long-term tech contracts, there's little hope of dramatically cutting its ludicrously high IT spend.

The Cabinet Office tactic of stopping expensive projects before they happen has only worked up to a point. Even then, an analysis reveals there has been major push-back from departments since former Cabinet Office minister Francis Maude stepped down.

About £6.3bn was spent with IT suppliers during the year 2014/15 – with 42 per cent going to just three suppliers, according to government data shared with The Register earlier this year.

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 our analysis of Cabinet Office data from the National Audit Office.

Major contract reform is clearly yet to happen.

Dodging the controls

Many departments have been getting round the Cabinet Office’s mandate that no contract should be worth more than £100m by extending their existing deals.

The exceptions to that are: the Department for Transport, which has brought its IT in-house; the Cabinet Office; and HMRC, which has already begun to take a staggered approach to throwing off Fujitsu and Capgemini and bringing in 400 smaller suppliers.

In order to establish how close Whitehall is to throwing off the shackles of its SI overlords, The Register sent a Freedom of Information request to each government department to details its main IT supplier, any extensions from the original start date, and what the total contract value will be by the time they end.

Given each department was asked exactly the same questions, responses wildly varied from not knowing how much spend goes on suppliers, refusing to release the information due to “commercial confidentiality”, or seeking clarity on the exact questions.

The genuine responses did not make for encouraging reading.

Total contract spend? Dunno...

The Ministry of Justice named Hewlett Packard Enterprise Services, Sopra Steria, Atos and CGI as its main suppliers, with all of those deals set to run out this year. The CGI contract was first signed in 2006 and was extended for three years.

Incredibly, the department could not say what the total contract value of those deals will be because “it does not hold the information.” Neither could it say what its exit strategy is for not signing new contracts worth more than £100m.

The Home Office signed a deal with Fujitsu in 2000, which it extended for five years in 2015 and now expects to expire in the first quarter of 2017. The total contract value of that deal is £640m.

On the topic of what next, it said:

The department has adopted a strategy aligned to the Cabinet Office and Government Digital Service approach of disaggregating large legacy IT contracts into smaller component services, which can be re-competed to capture technical innovation as it emerges, at lowest market cost. The department will be the controlling service integrator, managing a mixed economy of collaborating suppliers and Home Office service provision.

The Department for Work and Pensions would not name its suppliers, contract lengths or give the value of its contracts because it has “many IT service contracts across a scope of technology services”.

In a boilerplate statement it said: “The department is currently working towards the DWP 2020 Vision, pursuing flexibility across the breadth of Technology Service contracts to achieve better value for money.”

Don't understand the question

Four weeks after the request was submitted, the Ministry of Defence responded it could not answer the question as it needed clarity to know "specifically what you mean by main IT contractor to enable us to provide you with a response.”

Perhaps the most transparent response came from the Department for Environment, Food & Rural Affairs (Defra).

The main IT contract for Defra is with IBM and was signed in 2004, said the department. The contract is due to expire in 2018, following an extension in 2010, and is estimated to cost £1.4bn in total.

It even appeared to have the most coherent response for an exit strategy, saying:

Defra has set-up a programme to procure a new set of IT contracts that will replace the current incumbent supplier. The programme business case sets out the strategy and approach and has been shared and communicated with Cabinet Office and received Treasury approval.

In support of Defra’s key strategies and wider business benefits including reducing deliverability risk, the exit strategy is to adopt a disaggregated model. This is in line with Government strategy and emerging best practice.

'Must protect supplier'

In contrast, the Department for Business, Energy and Industrial Strategy (BEIS) named its main IT contractor as CGI but refused point blank to provide any more information because “disclosure of this information would weaken CGI UK Limited’s ability to participate competitively in a future commercial activity.”

That approach is in stark contrast to how other departments responded to the same request, the Cabinet Office’s transparency agenda, and the public interest, given the fact this is taxpayers' money which must be traceable.

On how it will split up its CGI deal, BEIS said: "The Department will exit from the current contract to replacement services procured against defined requirements. It is expected that the department will continue the current strategy of disaggregating IT services. It is not expected that any single contract will exceed £100m.”

For anybody who would rather tens-of-billions of government spending go on something else (in other words, everyone), it would be in all our interests to hold their feet to the fire and find out what their plan is next. ®

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