Ministers spend '10 times going rate' on IT work

The government's over-reliance on large contractors for its information technology needs combined with a lack of in-house skills is a "recipe for rip-offs" according to a study by the Public Administration Select Committee (PASC). The committee found that IT procurement too often resulted in late, over budget IT systems that are not fit for purpose. "We heard truly worrying accounts about the amount of money successive governments have wasted on failed IT projects," committee chairman Bernard Jenkin said. "According to some sources the government pays between seven and ten times more than the standard commercial rate for its work," he said, noting that the government does not collect the information needed to verify these claims itself. The government reportedly spent around £160 billion on IT systems in 2009, the last year for which estimates are available. The committee's study urges the government to improve the information it holds on IT spending and publish more information about IT projects. The government should also widen the supplier base by reducing the size of its contracts and simplifying the procurement process to enable small and medium businesses to bid for projects, the study says. The committee said: "IT procurement has too often resulted in late, over-budget IT systems that are not fit for purpose. "Given the cuts that they are having to make in response to the fiscal deficit it is ridiculous that some departments spend an average of £3,500 on a desktop PC." Some other departments were paying as little as £800 per PC, the study noted. The committee criticised the dominance of government IT by a small number of large companies. Jenkin said: "The government has said that it is overly-reliant on an oligopoly of suppliers; some witnesses went further and described the situation as a cartel." "Whatever we call the situation it has led to an inexcusable situation that sees governments waste an obscene amount of public money." Jenkin, a Conservative MP, said part of the problem was caused by the outsourcing of the government's whole IT service. "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," he said. Retail tycoon Sir Philip Green last year published a scathing report on government spending after it asked him to assess efficiency in Whitehall. He said the government is wasting billions every year by failing to negotiate the best contracts for phones, IT equipment and rent. "The only reason the government can operate like this and we can't is that they've got a printing press that prints money and we don't," Green told Sky News.