Jim Armitage: Let's end these rip-offs for the taxpayer on IT

Outlook Sometimes it seems like we should press control-alt-delete on the whole murky world of government IT procurement.

Margaret Hodge's sabre-toothed Public Accounts Committee shone some much-needed light on the chaos around big technology contracts inside Whitehall recently. Its report's name, A Recipe for Rip-offs, gives a clue as to what it found. So disorganised were some major IT contracts that when the Cabinet Office minister Francis Maude took office, his mandarins could not tell him how much the contracts were costing. He had to ask the suppliers. This kind of incompetence is the equivalent of a big flashing sign saying "Taxpayer's money: plunder at will".

We should applaud the Office of Fair Trading for launching an investigation yesterday into allegations by smaller firms that the big boys – Hewlett Packard, Capita and the like – are squeezing them out. If this is found to be true, it should be stamped upon – oligopolies encourage higher prices.

But while decent competition on the supply side will indeed help to keep down costs, surely more urgent is that Whitehall gets itself organised as a buyer.

It should take note of how the private sector procures from third parties: compare contracts to establish where better value can be found, prioritise IT at the very outset of new policy initiatives, hire, or train, teams of procurement specialists like FTSE-100 companies do. And, perhaps most importantly, when putting out new tenders, do not attempt to micromanage the design of the IT. Specify what it has to do, then let the contractors work out how to do it. That way Whitehall, and us taxpayers, can harness the kind of innovations at which the private sector is supposed to excel.

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