Whitehall IT running costs creep up again to £4.6bn

So much for Moore's Law: Costs of keeping lights on go up in Whitehall

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Many of those transactional contracts are now coming to an end, such as HMRC's £10.4bn Aspire contract, which the National Audit Office has warned could be too risky to change by 2017.

Some departments, such as the Department for Work and Pensions, have already opted to extend deals with the likes of HP.

One insider commented that the government does not currently have a model that could work at scale to replace the system integrator or "oligopoly" of suppliers.

For example, the possible success of the Service Integration and Management (SIAM) "tower model" in saving cash by splitting up contracts has yet to be proved.

The Ministry of Justice was one of the first departments to move to the model and is now in the process of integrating the components under its "Future IT Sourcing tower model", but insiders have described its progress as disastrous.

"The SIAM model should be recognised as chaotic. We have gone from one-two vendors to 10-20 and no one has made the interim steps work," said one source.

An attempt to showcase a more "agile" approach toward big transactional contracts via the Rural Payments Agency's digital-by-default Common Agricultural Payments system also ended in disaster when the online interface had to be scrapped earlier this year.

The system itself has had a history of IT disasters, but the failure to apply agile principles and introduce a 40-plus suppliers approach means there is no demonstrable working model for this approach, either.

Another government insider predicted that many departments will opt for a big invitation to tender to replace their contracts, rather than take the more difficult disaggregation route.

"That will go out and all the usual suspects will bid, the incumbent will win because they magically know all about the requirements and the contract will be renewed, perhaps a few tweaks here and there and perhaps a little cheaper to keep the Cabinet Office happy," the source suggested.

"Meanwhile, the taxpayer has shelled out millions on [consultants] to run the tender process, which was actually a completely pointless exercise. Unless it's a website, in which case some tiny 'agile' company will win it."

In other words, the government's multi-billion IT running spend isn't likely to go down by much anytime soon. ®

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