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UK.gov plans to overhaul £6bn in big IT deals 'watered down'

Brexit and loss of oversight casts doubt on reform agenda – sources

By Kat Hall, 18 May 2017

The British government's plans to overhaul £6bn in large IT contracts expiring within the next three years have fallen by the wayside, according to sources.

Insiders say the distraction of Brexit and a lack of will by the Government Digital Service under Kevin Cunnington's leadership have been blamed for the watering down of the reform agenda.

As much as £4bn of spend is locked into 60 IT programmes due to expire within the next year, The Register understands. However, one-third of those projects were already flagged as high risk prior to the referendum, meaning a successful transition off the contract is unlikely. That proportion is now thought to be much higher.

GDS's Common Technology Services (CTS) had been reviewing a number of major contracts and was working with departments to transition from those expensive deals.

However, Iain Patterson, head of CTS, recently stepped down from his role. No reason was given for his departure and a replacement has been not been named.

A document by the Cabinet Office's Complex Transactions Team last month, seen by The Register, said that disaggregating large expiring contracts gives organisations better visibility and control of systems and substantial cost savings. But it warned that "disaggregation is complex, takes longer than anticipated (up to four years), is resource intensive and needs to be well planned and executed ensuring, as a minimum."

The Complex Transactions Team was part of Patterson's Strategic Support Team. But the The Register understands it has been removed and significantly cut back – according to letters received by government departments. Sources say that without the Strategic Support Team working with departments, the task of moving off large contracts will be significantly more difficult.

Just three suppliers account for nearly 70 per cent of that locked-in spend for 2016/17: HP had the largest annual supplier spend of £975m, followed by Capgemini with £893m, and BT with £733m.

One of the biggest contracts on the list was HMRC's Aspire IT programme, the largest civil project in Europe, which will be worth £759m in 2016/17.

HMRC has said it is on track to complete its phased exit of the programme by the end of June 2017. But a National Audit Office (NAO) report last year warned that an extension was on the cards.

Multiple sources are reporting a number of departments now intend to simply renew their existing contracts with incumbent IT suppliers.

The Financial Times also reported that hundreds of contracts expiring this year are being renewed because civil servants are too busy with Brexit to focus on new and better-value tenders.

GDS also appears to have shifted away from large expiring contracts to supporting the technology needed in the Government Property Programme.

One well-placed contact said: "With Patterson gone I'm not even sure if Cunnington plans to keep CTS going. So he's giving up data strategy and spend controls that bite, bigging up Verify and the other bespoke platforms, pushing the sheep dip academy, but I don't see any big vision."

Another source added the current moves by GDS indicate a "watering down" of the reform agenda intended to break big government IT contracts.

GDS was handed a budget of £450m in November 2015 over four years.

In 2011, former Cabinet Office minister Francis Maude vowed to take on the supplier oligopoly. But Amyas Morse, auditor general at the NAO, questioned the government over its commitment to breaking big contracts, with 65 per cent of spend still going to the top ten suppliers.

John Manzoni, chief exec of the civil service, promised the government will start chopping up its big IT contracts within one-year and kick its dependency on just a handful of suppliers.

The Register revealed last year that the Home Office has already renewed its nearly two-decade-old IT Fujitsu contract until 2018.

A Cabinet Office spokesman said: "The Government Digital Service aim to support departments in delivering IT and digital services that offer value for money. This includes supporting them in sourcing suitable suppliers when coming to the end of legacy contracts." ®

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