IT firms ‘highest earners from Gov spending’

by Joe Curtis| 26 June 2014

But Institute for Government’s figures disputed by public body departments.

Big IT suppliers were the biggest winners of Government contracts over the past two years, according to a think tank's analysis of public spending that suggests £4.3bn was spent on just six IT firms in 2013.

HP received £1.7bn in each of the last two years to become the largest single recipient of Government money, according to the Institute for Government and data analysis firm Spend Network.

They crunched millions of transactions from 247 central and local government bodies for 2012 and 2013.

But a think tank spokesman warned the figures were being reexamined after the Government disputed them.

The researchers initially believed 86% of HP's public sector revenue came from a job centre contract with the Department for Work and Pensions (DWP), but the DWP told CBR the figure was "just wrong".

A spokesman added: "The correct figure is several hundred million a year to cover the majority of IT services and IT development used by DWP.

"This includes the IT platforms which are used for the processing of benefits and pensions."

Initial reports carrying the news said the Institute advised caution when interpreting the data, with verification estimated to take several days, as well as urging ministers to make more data public to increase scrutiny in future.

The Institute for Government expects to publish the figures on its website later today after re-examining them in light of the DWP's response.

In the initial report, the five other IT firms named among the Government's biggest suppliers were Capgemini, amassing £1.01bn in 2013, Fujitsu with £415m, Atos on £401m, IBM on £365m and CSC with £306m.

The figures come at a time when Whitehall is trying to cut reliance on big IT suppliers in favour of procuring more services from SMBs.

The energy and business departments' recent switch from a Fujitsu-provided IT system to one provided by several SMBs resulted in delays partly caused by problems integrating the smaller suppliers' services.

Flaws in the think tank's data outlined by researchers when it was first published included the names of companies being redacted, as well as difficulty tracing exact sums to individual companies involved with private finance initiatives.

The report was quoted by the BBC as saying: "Genuinely meaningful data on the value for money of government suppliers would allow citizens and civil society to hold government departments to account for their ability to manage suppliers and public service markets effectively.

"For this reason, there should be clearer obligations to... publish details of their performance against contractual obligations, which some providers and agencies already provide but many do not."

A Cabinet Office spokesman said: "Through our long-term economic plan we have done more than any other government to open up contracts and address long-standing weaknesses in commercial skills. Before 2010 no one knew who Government suppliers were nor how much business SMBs won. We are levelling the playing field for smaller companies and growing a more diverse market for suppliers but there's more to do particularly as major legacy contracts expire in the years ahead.

"We welcome this analysis which draws on our published data and will look at how we can go further with our transparency".

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