IT Firms Bag Majority Of £10bn Annual Government Spend

Jun 26, 2014

Just 20 suppliers received a share of the £21bn spent by government across 2012 and 2013 – six of which are IT firms, claims new research.

Think tank Institute for Government and open purchasing data organisation Spend Network analysed millions of purchasing transactions from 247 central and local public sector bodies.

The analysis contains the name of 180,000 suppliers in total, but it was found that the top 20% of the spending that was examined goes to just 20 providers.

Their data revealed that over the time period, ICT companies received the bulk of government spending, gaining £4.49bn in 2012 and £4.13bn last year.

The study revealed that HP is the single largest government provider – receiving nearly £2bn in FY 2012-13 and £1.7bn the following year.

Capgemini follows closely behind, with an annual spend of around £1bn, while Fujitsu, Atos, IBM and CSC also feature on the list.

HM Revenue and Customs (HMRC) was named as a big-spender – it was reported that 82% of Capgemini’s government revenue came from one project, Aspire, an overhaul of the HMRC IT systems.

The remaining 14 providers on the list are classified as telecoms, outsourcing, construction, facilities, waste management, defence or utilities firms.

Researchers Urge People Not To Draw Conclusions Yet

Both Institute for Government and Spend Network have warned there may be inaccuracies in the data.

They say that because not all public sector purchasing data is publicly published, there are likely to be inconsistencies, but their report is the most comprehensive so far.

Gavin Freeguard, researcher at the Institute, claims the fact that such a report was possible means that Whitehall is taking a step in the right direction towards transparency.

But “It reflects well on the government’s commitment to transparency that we’ve been able to produce this analysis of independent suppliers to government,” Freeguard claimed.

“Nonetheless, this research shows how difficult it is to analyse who is contracted to provide our public services and what it costs,” he added.

DWP Exemplifies Errors Made  

The Department of Work and Pensions (DWP) has already come forward to demonstrate that these figures may be inaccurate, after researchers claimed that 86% of the HP spend went towards a job centre contract.

“The correct figure is several hundred million a year to cover the majority of IT services and development used by DWP,” the Department said.

“This includes the IT platforms which are used for the processing of benefits and pensions,” it added.




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