US computer giant Hewlett-Packard rakes in £140m a month from Whitehall

Billions are being spent on ‘over the odds’ IT contracts but ministers say hands are tied by long-term deals

Whitehall Editor

Private IT companies are being paid almost £5bn a year by the taxpayer to run Government computer networks, startling new figures reveal today.

An analysis of contracts across Whitehall shows that the American computer giant Hewlett-Packard alone was paid £140m a month last year by the Department of Work and Pensions (DWP) and the Ministry of Justice for computer services. 

Another IT firm, Capgemini, holds contracts worth £1bn a year to supply and maintain computers across central and local government.

In total the Government paid £10bn to its top 20 contractors in 2013. Almost half of this was spent on IT.

The sums paid out to major international IT firms dwarf the £2.2bn paid to ‘outsourcing’ companies like Serco and G4S, who have been subjected to the most ferocious public criticism over their state contracts.

The figures were uncovered by the Whitehall think-tank, the Institute for Government, and Spend Network, which aggregates raw Whitehall spending data to show which private companies are the biggest recipients of taxpayer largesse.

Researchers studied 38 million transactions with over 180,000 suppliers. The project required over 16,000 hours of analysis over two years.

It reveals that out of the top 20 private sector contractors in Whitehall, six are IT firms who between them receive around £3bn a year from central government and another £1bn a year from local councils.

Among the biggest departmental spenders on IT were HM Revenue & Customs (HMRC), DWP and the Ministry of Defence. HMRC for example spent 86 per cent of its contracting budget with Capgemini.

Overall there are at least eight IT suppliers receiving more than £100m every year from a single government department, and at least 15 suppliers receiving more than £100m in annual revenues from multiple Government departments.

The largest contractor – the American IT giant Hewlett-Packard – has contracts worth £1.7bn a year.

The firm was one of the contractors given money by the DWP to develop its so far ill-fated Universal Credit project. £34m of that has so far been written-off.

Last night Cabinet Office sources said ministers were well aware that they were paying “over the odds” on a significant number of IT projects across Whitehall.

But they said there was currently very little they could do as the Government was locked into long-term contracts signed under the last Labour administration.

They added that a number of these were due for renewal in 2015/16 at which point they expected central government IT spend to fall very significantly.

“This is a problem which we raised on day one when we went into Government,” they said. “But many of these contracts were signed to run for many years without break clauses.

“We have a clear strategy in place to ensure that all future contracts will represent much better value for money and we expect very significant savings as these contracts come up for renewal.”

A spokeswoman for HP said the company was “a proud and longstanding supplier of IT products and services to Her Majesty’s Government” and provided “vital public services to UK citizens”.

“HP supports the drive for greater transparency and subcontracts around one quarter of its UK public sector ICT services work to other vendors of all shapes and sizes, including more than 700 small and medium enterprises,” she added.

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Arts and Entertainment
JK Rowling will not be releasing a 'romance' novel anytime soon
books
Life and Style
tech

Of all the computers Apple has ever made there’s only one that Steve Jobs had to sell his car to finance

Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidates on the verge of tears as they were ejected from the boardroom
News
One of the 'princesses' in the video
videoYouTube reinstates sweary video after takedown for 'violating terms'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Systems Tester - Functional/Non-Functional/Full Life Cycle

£20000 - £22000 per annum: Ashdown Group: Systems Tester - Functional/Non-Func...

SQL Developer with T-SQL, Watford, Hertfordshire - £350 - £360

£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...

Business Intelligence Consultant - Central London - £80,000

£65000 - £80000 per annum: Ashdown Group: Business Intelligence Consultant - C...

SEN Teaching Assistant

£70 - £85 per day: Randstad Education Group: SEN Teaching Assistants needed in...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?