With billions in UK govt IT contracts about to expire, get the next vendors to act right

Poor performers get renewals, new small outfits discouraged from bidding, say researchers

UK government IT contracts worth £23.4 billion are due to end during the current five-year Parliament, according to researchers who warn that poor performing suppliers are hardly ever excluded from bidding again.

A report by public spending research company Tussell and the Institute for Government found that a third of these, worth £9 billion, are supposed to finish up in 2025.

The report points out that large contracts expiring next year include the longstanding Post Office deal with Fujitsu to build and manage the Horizon IT system at the center of one of the greatest miscarriages of justice in the UK. From 1999 until 2015, 736 local branch managers were wrongfully convicted of fraud when errors in the system were to blame. The total value of the Horizon contract is £2.38 billion ($3.15 billion). It is due to expire on March 31, 2025.

The report – also from bid-writing technology firm AutogenAI – found that spending on ICT contracts has increased by 90 percent over the last five years.

The researchers warn that poor-performing suppliers to UK government are virtually never excluded from supplying the public sector and often continue to receive government money. Meanwhile, a large number of contracts, totaling billions of pounds, are overseen by officials who are not commercial specialists.

The report also highlights that poor data across government departments meant officials didn't know how much they were spending and with whom. And new providers that could perhaps deliver better services for less money are discouraged from bidding for business.

Nick Davies, program director at the Institute for Government, said: "The new government has an opportunity for a step-change in how it holds suppliers and the public sector to account. Procurement makes up almost a third of all government spending. Given the difficult fiscal inheritance the government is facing, getting accountability in procurement right should be central to delivering mission-led government."

"Public procurement is a huge market hiding in plain sight, accounting for approximately one-third of all public spending and 10 percent of UK GDP," said Gus Tugendhat, founder of Tussell.

"In the context of tight budgets and strained public services, getting value for money out of government contracts is more important than ever," he said. ®

Bootnote

Post Office chief executive Nick Read is set to step down from his role next year. In July, he said he would cut back his frontline role to be ready for the "critical" next stage of the Horizon IT inquiry. He joined the Post Office in 2019 after the prosecutions of subpostmasters had ended. He has yet to appear before the inquiry.