Watchdog turns spotlight on public sector IT costs
Wednesday 03 July 2013
Government IT suppliers are in danger of a competition probe after the UK’s trading watchdog turned its spotlight on the £10.4 billion public sector computing market today.
The Office of Fair Trading is calling for information on the market amid a raft of concerns including the dominance of larger suppliers, higher barriers to entry for smaller firms and the difficulty of switching between suppliers.
The OFT will also focus on whether some firms seek to limit the compatibility of their own systems with rivals’ and if the public sector’s heavy dependence on suppliers affects its ability to gain value for money.
The biggest players in the market are Hewlett Packard, Capita, CapGemini, Fujitsu and BT’s global services arm. But in 2011 the Cabinet Office pledged to “put an end to the oligopoly of large suppliers that monopolise its ICT provision” as well as “break down the barriers that impede SMEs from bidding for contracts”.
A recent inquiry into the sector from the Public Accounts Committee heard evidence from smaller firms who claimed a “cartel” was operating although this was denied by the bigger firms. Its report said it was “ridiculous that some departments spend an average of £3500 on a desktop PC”.
OFT chief executive Clive Maxwell said: “Given the vital role that this technology plays in the delivery of public services and the cost to the taxpayer, the OFT believes it is important to explore whether there are any restrictions on competition.
“We want to hear both from industry suppliers and public sector users about how competition in this market works, any problems that they have experienced, and how it could be made to work better.”
PAC chairwoman Margaret Hodge welcomed the OFT’s move. She said: “This is an area where there has to be better value for money for the taxpayer. Too many projects cost too much and too many go wrong.”
The watchdog is keen to examine whether the practice of bundling contracts together by different local authorities acts as a hurdle to smaller firms unable to deliver aggregated deals.
It is also worried that framework agreements could restrict the number of competitors able to win contracts or deter suppliers from joining because of the costs involved.
The OFT’s options include beginning competition enforcement proceedings, launching a market study, or seeking voluntary action from the industry.
- 2 The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
- 3 Ball pool for adults opens in London
- 4 Amal Clooney gives excellent response to fashion question at European Court of Human Rights
- 5 Baldness could soon be treated using stem cells, scientists hope
Woman falls to her death as she celebrates marriage proposal at the edge of Ibiza cliff
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
The awkward moment Sarah Palin raised $25,000 for Hillary Clinton's election campaign
Ball pool for adults opens in London
Amal Clooney gives excellent response to fashion question at European Court of Human Rights
9 reasons Greece's experiment with the radical left is doomed to failure
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
Have we reached 'peak food'? Shortages loom as global production rates slow
Greece elections: Syriza and EU on collision course after election win for left-wing party
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£13000 per annum: Recruitment Genius: This Pension Specialist was established ...
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...