Maude Caps Central Government IT Contracts at £100m

Jan 27, 2014

In a bid to ensure claimed maximum taxpayer value, central government IT contracts have been capped at £100m in newly published “red lines” by the Cabinet Office today.

Minister for the Cabinet Office, Francis Maude, said: “Big IT and big failure have stalked government for too long; that is why this government is radically rethinking the way it does business.”

The new rules are claimed to guarantee the best deal for the taxpayers from public sector IT by reducing waste spend and curb what can often prove to be notoriously out of control big Whitehall tech projects.

Competition for contracts in the sector will be encouraged, says Maude’s team, as the government is now open to the widest range of suppliers, with a claimed end to long and inflexible contracts.

Chief Technology Officer for HM Government, Liam Maxwell, claims this will “create the efficient and responsive services that the public demands.”

Along with the cap, new hosting contracts between IT suppliers and central government Departments will:

  • not last for more than 2 years
  • there will be no automatic extensions
  • companies with a service provision contract will not be allowed to provide system integration in the same part of government.

The new rules follow a National Audit Office report criticising “weak management, ineffective control and poor governance” of the planned £300m IT system to support the proposed Universal Credit reforms.  

This is not the first time a £100m cap on IT projects has been announced. In 2010, the new coalition government pledged a £100 limit on IT projects, which became official policy on 1st April 2012.

Progress has already been made in opening up government to small suppliers with the introductions of a new procurement framework, claims the government with 84% of suppliers who have secured contracts through this new framework being identified as small to medium enterprises. 




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