A new report by UK watchdog the National Audit Office (NAO) has highlighted ongoing issues with the ways in which the country’s public sector approaches IT procurement.
According to the report, the Government has the potential to achieve meaningful cost savings by changing the way it engages with technology suppliers. But it will only do so if it “learns from its past procurement approaches to large-scale digital transformation projects”. The government’s past projects, the NAO argues, were riddled with mistakes, resulting in “decades of poor progress” and billions in mismanaged spend.
“Government needs to rethink how it procures digitally, including how to deal with ‘big tech’ and global cloud providers that are bigger than governments themselves,” commented Gareth Davies, head of the NAO.
The £14 billion problem
The NAO’s report highlights the fact that the UK government spends approximately £14 billion annually on digital procurement — a figure that has crept up over the past decade — with “mixed” results. The report suggests that a lack of technical expertise within government is at least in part responsible for the public sector’s mismanagement of the shift towards managed service models.
With the market shifting towards cloud-based platforms and SaaS models, the NAO argues that traditional models of outsourcing or creating government-owned assets are giving way to subscription-based models such as the use of cloud services. The government, they argue, has been slow to adapt to this new state of affairs. As a result, the report argues that the government needs to rework the the ways in which it engages with and manages suppliers. The government needs to define “a comprehensive sourcing strategy for the digital age” which, specifically, redresses the government’s approach to dealing with large technology vendors.
“Government has a long-standing need to improve its use of technology suppliers, and its slow progress in doing this has contributed to poor outcomes in its attempts to modernise government,” adds the report.
In a press release, Davies criticised a “lack of digital and procurement capability within government”, which he argues has resulted in wasted expenditure and lack of progress on major digital transformation programmes.”