The end of IT mega-contracts and a State welcome for SMEs

The Telegraph reports today that Francis Maude, the Cabinet Office minister, has told an audience of chief executives from 31 key government suppliers including BT, Hewlett Packard, IBM and CapGemini, that costly IT mistakes like the £12.7bn NHS...

Share

The Telegraph reports today that Francis Maude, the Cabinet Office minister, has told an audience of chief executives from 31 key government suppliers including BT, Hewlett Packard, IBM and CapGemini, that costly IT mistakes like the £12.7bn NHS national programme [NPfIT] would not be repeated. 

Contracts in future would be for cheaper, smaller and off-the-shelf systems, not expensive, bespoke software, he said. 

"Government will no longer offer the easy margins of the past. We will open up the market to smaller suppliers and mutuals and we will expect you to partner with them as equals, not as sub-ordinates.

"The days of the mega IT contracts are over, we will need you to rethink the way you approach projects, making them smaller, off the shelf and open source where possible.

"We will expect you to be transparent in all your dealings with us and for the terms of the contracts we sign with you to go up online." 

Government buyers had to cope with 6,000 pages of guidance on procurement. "This is at the root of much of the bureaucracy, duplication and confusion in this area."

The knock-on effect was that supplying the public sector was unnecessarily expensive.

"You will have had to deal with contracts where the specification changed 10 times before you were through, where your employees were manmarked by civil servants and where the individuals you were working with constantly changed." 

In a separate interview Maude said he plans to break up large IT contracts so that established UK companies can pitch for the work. He called on Whitehall departments to become less averse to risk when selecting suppliers. 

He said that much central government procurement militates against the effective involvement and participation of smaller businesses.

"We are not going to ordain that there must be more contracts actually going to small businesses, but we will ordain that the procurement system must be run in a way that opens it up to small businesses."

The Cabinet Office is rolling out a standard pre-qualification questionnaire across Whitehall next month, which will be welcomed by SMEs whose directors have spent days completing PQQs that were tailored to each procurement.

Comment:

It's hard to argue with what Francis Maude says, and his pledge to avoid mega projects is especially welcome. The big suppliers have had it too good for too long. 

But his words may have little effect on departments, agencies, quangos, local authorities, the NHS and police. 

The Cabinet Office can issue the wisest of proclamations but little will change unless its Efficiency and Reform Group uses its power of veto over spending on projects that don't meet the Coalition's anti-silo, anti-complexity philosophy.

Permanent secretaries have long greeted proclamations by the Cabinet Office with deferential impassiveness. Departments have budgets to be accountable for, and public services to deliver. The Cabinet Office doesn't have either, they argue. 

But the Cabinet Office is pivotal to the Coalition's plans to reform central government. It can and should bring about simplification and standardisation. It can bring about change through measured and thoroughly tested innovation. 

Cajoling will go nowhere. Departments will take the Cabinet Office seriously only when, in collaboration with the Treasury,  it refuses money for projects that don't conform. 

Links