Government 'wastes obscene amount of money' on IT projects

Some departments spend an average of 3,500 on a desktop computer, it has been claimed.

The Public Administration Select Committee (PASC) found ministers were "overly reliant" on a few large suppliers, resulting in the waste of an "obscene amount of public money".

Committee chairman Bernard Jenkin said that according to some sources, the government paid contractors between seven and ten times more than the standard rate.

But ministers did not collect the information required to verify these claims, he added.

In a report published today, the cross-party committee found the government's overall record in developing and implementing new IT systems was "appalling".

The report stated: "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."

The committee criticised the dominance of government IT by a small number of large firms.

Conservative MP Mr 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."

The PASC called on the coalition to take steps to "break out" of its relationship with the few large suppliers. Ministers should widen the supplier base by reducing the size of their contracts and simplify the procurement process to engage with small- and medium-sized enterprises, the MPs said.

They should also improve the information held on IT spending so they are better able to secure the best price, and publish the costs of IT projects to allow external experts to identify ways to save money, the report said.

Mr 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."