Local councils struggle with ill-fitting software despite spending billions with suppliers

Even when tech crew gets the tweaks approved, vendor lead times are bonkers, says report

UK councils might spend £8 billion ($10.1 billion) on tech each year, yet some find that suppliers don't have the wares they need and customizations can "incur significant costs."

Or so says a report [PDF] from the Department for Levelling Up, Housing and Communities, which highlights hurdles local government can face when buying tech to solve specific problems. And even when they are prepared to pay for requested tweaks, lead times are often lengthy and the councils are locked into systems that lack suitability.

Councils, it notes, are "working within a market that doesn't always provide what they need, where implementing even minor changes can incur significant costs and lengthy timelines and they are locked in to systems that aren't fit for purpose. Added to this councils may not have the skills or knowledge to procure effectively."

Collectively, councils spend around £1-2 billion ($1.26 billion to $2.52 billion) a year on IT directly, of which as much as £1 billion ($1.26 billion) is used to maintain outdated and legacy systems, the report says.

The £8 billion ($10.1 billion) figure quoted also includes staff and procurement costs.

Within the document, original research based on roundtables and case studies details the challenges council IT staff typically face.

Councils mainly focused on a string of critical services, some of which they are legally bound to provide, which makes prioritization of ICT projects difficult, the doc says. And with departments heavily "siloed," getting a coherent digital transformation plan is tough.

At the same time, different parts of a council can have different governance, again challenging ICT project plans and funding. They can't learn from the past either, because they don't have the quality of data. Lack of skills is a perennial problem, the report adds.

One council worker summed it up: "It's difficult to prioritise change projects without a clear set of priorities to align to. The goals in the Council Plan are too vague. They can be used to justify any piece of work. We don't have the headspace to define direction when we are hard pushed to keep the lights on. We need to stop some things, which requires stronger direction from the top."

Based on earlier studies, the report estimates the direct cost of IT project failures across local government could be between £19 million and £31 million per year ($24-$38 million).

"The value of other productive activities that could have been achieved without these failures is likely to exceed these estimates," the report says.

The tales outlined in the paper will be familiar to readers of The Register. Something of a worst-case exemplar is Birmingham City Council's implementation of Oracle HR, finance and procurement.

The implementation budget has ballooned from £20 million to £131 million (from $25 million to $165 million), as the council failed to successfully create adaptations to make the software fit its needs. The council now plans to re-implement Oracle out of the box. In the meantime it is paying £5.1 million ($6.44 million) for a third party solution to plug the gap. ®