Information Technology (IT) plays a fundamental role in the provision of public services. However, despite a number of successful initiatives, government's overall record in developing and implementing new IT systems is appalling. The lack of IT skills in government and over-reliance on contracting out is a fundamental problem which has been described as a "recipe for rip-offs".
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. This Government, like many before it, has an ambitious programme aimed at reforming how it uses IT. This Report sets out what the Government must address if these reforms are to succeed where previous attempts have failed.
We found that government is currently over-reliant on a small "oligopoly" of large suppliers, which some witnesses referred to as a "cartel". Whether or not this constitutes a cartel in legal terms, current arrangements have led to a perverse situation in which governments have wasted an obscene amount of public money. Benchmarking studies have demonstrated that government pays substantially more for IT when compared to commercial rates. The Government needs to break out of this relationship. It should do this by:
i. Improving its own information. The Government's own information about its IT is woefully inadequate. This lack of data means that governments have failed to benchmark the price it pays for IT goods and services; this data must be collected centrally to allow the Government to obtain the best possible price from the market.
ii. Publishing more information. The Government has already started publishing large amounts of information about its expenditure as part of its transparency agenda. The Government should go further and make public not just information about how much its IT costs, but also about how its systems run. All IT procurement contracts should be published in full to ensure transparency and restore trust. This would allow external experts to challenge current practices and identify ways services could be delivered differently as well as more economically.
iii. Widening the supplier base. The Government must expand its supplier base by promoting fair and open competition and engaging with innovative SMEs. To widen the supplier base the Government needs to reduce the size of its contracts and greatly simplify the procurement process. It must also adopt common standards and ensure that systems interoperate to eliminate over-reliance on a small group of suppliers, and commoditise where possible. Most importantly, departments need the capacity to deal directly with a wider range of suppliers, especially SMEs.
iv. Working in an "agile" manner. The challenges that government seeks to address are constantly changing. Often the IT systems that government develops are already out of date before they have been implemented. The Government needs to move towards the use of agile and iterative development methods which enable IT programmes to adapt to changes.
Above all, 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 IT service means that many civil service staff, along with their knowledge, skills, networks and infrastructure has been transferred to suppliers. The Government needs to rebuild this capacity urgently.
Finally, we outline our own vision for how the delivery of public services online could be reformed through a combination of data release, giving individuals control of their own personal records, engaging users in the design and continuous improvement of services and opening up the delivery of online services to a greater range of organisations.
The Government has set out its own milestones for success in its ICT Strategy. We shall be returning to this topic to monitor the Government's progress against these targets, and the recommendations set out in this Report.