Original URL: http://www.theregister.co.uk/2011/07/28/mps_slam_government_it_spend/

MPs slam government's 'obscene' IT spend

Gov pays 7 to 10 times the going rate

By Guardian Government Computing

Posted in Government, 28th July 2011 09:19 GMT

An all-party committee of MPs has found that successive governments' over-reliance on big IT companies and poor in-house skills, has led to a "perverse situation" in which governments have wasted "obscene" amounts of public money.

In its report titled Government and IT – a recipe for rip-offs: time for a new approach, the public administration select committee says that while the government is making cuts in response to the deficit, some Whitehall departments are spending an average of £3,500 on a desktop PC. It describes the situation as "ridiculous".

Conservative MP Bernard Jenkin, the chair of the committee, said: "According to some sources, the government pays between seven and 10 times more than the standard commercial rate for its work. However, the government does not collect the information needed to verify these claims."

The committee also found that government is over-reliant on a small "oligopoly" of large suppliers, which Martin Rice, chief executive of Erudine, an IT SME, described as a "cartel".

The report says, however, that IT industry body Intellect responded to Rice by telling the committee that "such a suggestion is not only inaccurate and misleading, but also potentially damaging to an industry that is a vital part of the UK economy".

But the committee says it also received suggestions from some SMEs that the major system integrators used legacy systems as leverage to maintain their dominance.

Some SMEs reported that there were solutions that could easily transfer data from old platforms, but that a combination of risk aversion and vested interests prevented these solutions being adopted.

The committee points to government's failure to re-use and adapt existing systems, the overcapacity in data centres and a lack of interoperability. It says these appear symptomatic of more fundamental problems, including a lack of effective cross-departmental working and IT governance across Whitehall.

The government's attempt to analyse current deficiencies are welcomed by the committee. But it says it is not clear whether the government has identified the fundamental causes of failure or simply listed its symptoms.

The committee makes four recommendations:

Jenkin said: "To address these challenges successfully, the government needs to possess the necessary skills and knowledge in-house, to manage suppliers and understand the potential IT has to transform the services it delivers.

"Currently the outsourcing of the government's whole IT service means that many civil service staff, along with their knowledge, skills, networks and infrastructure have been transferred to suppliers. The government needs to rebuild this capacity urgently."

This article was originally published at Guardian Government Computing.

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