Government squanders public money on 'rip-off' PCs

The Government is squandering an "obscene amount of public money" on computer equipment, paying an average of £3,500 for desktop PCs costing £500 on the high street, a scathing report from MPs says today.

The Public Administration Select Committee (PASC) found ministers were "overly reliant" on a few large suppliers, suggesting the companies were acting as a cartel to win contracts at inflated prices.

During its investigation it said it had uncovered a series of instances of "IT mismanagement" including:

* Delays designing the system to run the new Universal Credit system.

* A company pulling out of preparations for the electronic patient record database.

* The cancellation of a contract by the Department of Work and Pensions with Fujitsu for desktop computers.

The Tory MP Bernard Jenkin, the committee's chairman, said that according to some sources, the Government paid contractors between seven and 10 times more than the standard rate. But ministers did not collect the information required to verify these claims.

His committee denounced the Government's overall record in developing and implementing new IT systems as "appalling". The report said: "The lack of IT skills in Government and over-reliance on contracting out is a fundamental problem which has been described as a 'recipe for rip-offs'. IT procurement has too often resulted in late, over-budget IT systems that are not fit for purpose.

"Given the cuts that they are having to make in response to the fiscal deficit it is ridiculous that some departments spend an average of £3,500 on a desktop PC." The committee criticised the dominance of Government IT by a small number of large companies.

Mr Jenkin said: "The Government has said that it is overly-reliant on an 'oligopoly' of suppliers; some witnesses went further and described the situation as a 'cartel'. It has led to an inexcusable situation that sees governments waste an obscene amount of public money."

The PASC called on the Coalition to take steps to "break out" of its relationship with the few large suppliers.

Whitehall has long had a grim record of IT projects running over-budget and behind schedule. They include the computer systems designed to underpin the Child Support Agency, the national ID card scheme and the National Offender Management Information System.