OFT to look at 'public sector IT rip-offs'

A competition inquiry into potential public sector IT rip-offs moved closer yesterday as the UK's trading watchdog stepped up its interest in the £13.8bn market.

The Office of Fair Trading is beginning a market study of the sector after concerns were raised over the large share of contracts claimed by firms in some fields, high barriers to entry, and difficulties and high costs faced by departments in switching suppliers.

The biggest players in the market are Hewlett Packard, Capita, CapGemini, Fujitsu and BT's global services arm. A recent inquiry by the Commons Public Accounts Committee heard smaller firms claim a "cartel" was operating, although this was denied by the bigger players.

Possible outcomes of the study include a full-scale investigation, enforcement action, or recommendations for changes in laws and regulations.

Nisha Arora, a senior director at the OFT, said: "We want to look further into this market to understand whether it is really serving customers' interests."