SMEs could save government millions in IT projects

SMEs in the IT sector have shown disgust at the latest revelations surrounding government spending.

Late, over-budget and unfit for purpose were the words used to describe the government’s IT spending according to a report by a committee of MPs last week. The report stated that the over-reliance of a cartel of large IT firms has resulted in successive governments wasting a massive amount of public money on IT procurement.

The report, titled “A Recipe for Rip-Offs”: Time for a New Approach, found that the government does not have an acceptable level of knowledge of its own IT systems, because the outsourcing of its IT service means that many civil service staff, along with their knowledge, skills, networks and infrastructure have been passed on to suppliers.

The most damning aspect of the report suggested that successive governments have wasted vast sums of public money by being over-reliant on a small group of large IT suppliers. According to the report some government departments spend an average of £3,500 on a single desktop PC.

The report further warned that the government will be “doomed to repeat the mistakes of the past” if it does not learn to be more intelligent in its dealing with IT suppliers and improve the way it compares costs across different departments, known as ‘benchmarking’. In 2009, the last Labour government spent £16bn in IT projects.

Commenting on the issue, managing director of Node4, Andrew Gilbert said:
“The government needs to urgently review the tendering process for public sector contracts to allow a level playing field for SMEs to compete for government work – an initiative which could save millions of pounds and dramatically improve the quality of IT services supplied to the government as a result of the increased competition.”

Prime Minister David Cameron vowed to end the era of vast government IT projects that he said had dominated Labour’s time in power.

Among the actions outlined by the report to be procured by the government, it was also recommended that government departments move away from large firms and source their IT needs from small and medium-sized businesses to avoid being ripped off, as the UK government attempts to reduce the budget deficit. The government claimed that departments had paid IT contractors 7-10 times the going standard rate, and that this had to be stopped.

Gilbert further stated: “There are many medium-sized technology companies that have considerable experience in providing IT services on a large scale and would be very capable of providing tremendous value for the tax payer. Many of these companies run as lean operations with overheads kept to a bare minimum and a strong commitment to delivering value for money to their customers. The tax payer would benefit enormously from the services of these companies which operate on a strong customer-focussed ethos born out of delivering to highly demanding private sector clients.”

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