Last week’s call from shadow home secretary David Davis for MPs to oversee the contractual arrangements for the government’s ID cards scheme is the latest in the wrangle between the Conservative party and IT trade body Intellect.
But industry insiders describe the row as a storm in a teacup, and dismiss claims that the row has constitutional implications.
The spat began this month when Davis wrote to potential suppliers stating his party’s policy to cancel the scheme if they win the next general election.
In response, Intellect accused the Tories of using the IT industry as ‘a mechanism for scoring political points’, and warned that such statements could push up the price of both these and other government technology deals.
The result has been much debate about the constitutional question of how far one government can tie down its successor, and how the risks of policy change are costed into the deals offered by public sector suppliers.
Davis’ letter to Edward Leigh, chairman of the influential House of Commons Public Accounts Committee (PAC), expressed concern that building in extra penalties based on the risk of the programme being cancelled could be manipulated against the public interest.
‘Notwithstanding the risk to the taxpayer such liabilities would involve, there may be a common commercial and political interest in increasing the penalties for cancelling the project. If so, it raises serious questions of public interest, and of constitutional propriety,’ wrote Davis.
‘PAC scrutiny of the contractual arrangements would help ensure they have been properly negotiated, in a manner which is conducive to the wider public interest,’ he wrote.
But industry experts say companies working with the government are well-used to potential changes in policy, and the row illustrates little more than the sensitivity of the ID cards issue.
‘All this is just a storm in a teacup,’ said one major supplier.
‘There was political risk to the ID plan before David Davis’ statement, and political risk afterwards – anyone who had the view, before these comments, that there was not a very substantial chance the Tories would cancel it must have been on drugs,’ said the source.
‘If anything these statements mean there is greater clarity now,’ they said.
In terms of contractual risk, ID cards are no different from any other major infrastructure programme – IT or otherwise, says Eric Woods, government practice director at analyst Ovum.
‘If this was about the channel tunnel or a new hospital then the Opposition behaviour could be seen as unhelpful, but this is an incredibly politically sensitive project,’ said Woods.
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