Confusion reigns over government IT

The Building Schools for the Future programme is under review

The coalition government’s plans regarding public-sector technology spending have caused a lot of head-scratching and even some eye-rolling within the IT sector.

There is, for example, growing confusion around the fate of the Building Schools for the Future (BSF) programme, an initiative that has generated huge business for IT companies.

The £55bn scheme, which was launched by the previous government to rebuild or refurbish England’s secondary schools, is currently under review, according to schools minister Nick Gibb. And yet there have been a rash of BSF contracts announced since the election, including a £12.98m deal between IT services firm Northgate and Hartlepool Borough Council and one signed by Civica and Wolverhampton City Council as part of the authority’s £370m BSF programme. Most recently, there was a tender from Barnet Council for BSF ICT services worth £10m.

Research director at analyst TechMarketView Georgina O’Toole said the industry needs clarity. “Many of these suppliers will be paying staff in the anticipation that these projects will go ahead. They could potentially lose significant amounts of money,” she said.

“The tendering process can take more than 70 weeks and cost six-figure sums, so until there is some clarity it would be unwise for suppliers to bid.”

Axing consultants
While it is not clear yet whether BSF is for the chop, there are other areas that will certainly be axed. One is the use of technology consultants, as part of £1bn in savings to be made on “discretionary spending”.

Gartner research director Massimiliano Claps explained the move was positive in the short term, because it would help keep expenses under control and provide government departments with an incentive to shore up internal knowledge by training their own staff.

However, he argued that accruing knowledge will take time and may be more difficult for some departments than others: “Defence has always been heavily reliant on the knowledge of contractors because of the span of its activities – it needs [technology] experts across sectors that include the environment, telecoms, transport and medicine, and there will be a huge gap in delivery without this knowledge.”

Large or small suppliers
The government’s freeze on all programmes above £1m is viewed sceptically by those who say that some programmes will be less expensive when procured at scale. And the cap may be too limited for the sort of collaborative procurement – in areas such as desktop management – recommended by a review of collaborative procurement released by the National Audit Office on 21 May. The report urged the public sector to take advantage of the buying power that results from its scale.

Michael Keegan, head of business development, government business division at Fujisu, reiterates this: “One size doesn’t fit all. Some contracts are best contracted at scale while others are best delivered by smaller, niche companies. For example, the £200m DWP desktop contract [signed in February] arguably needed a company of scale with resources to be able to deliver [140,000 desktop devices]. It is also easier for the government if it has one throat to choke,” he said.

However, Gartner’s Claps argued that although the usual suspects such as HP and IBM will continue to provide contracts even when they are broken down into smaller chunks, albeit often sub-contracting niche elements, this is likely to change over the next few years as government makes more use of the cloud.

Claps said this trend will be particularly strong in local government, where processes are less complex to manage compared with national agencies.

“Smaller, local suppliers will begin working with the likes of Amazon or Microsoft to design applications specifically for the cloud,” he said. “Systems integration as we know it will not be required.”

However, Matt Howell, head of technology services for the public sector at Cap Gemini, argued that this was not the whole story: “Cloud services are often only guaranteed at 98 per cent availability, which is simply not good enough for many local government services such as a hospital or a police operation. Also, there will still be a need for customer-facing systems to integrate with back-office systems even if they reside in the cloud.”

There is also the issue of regulations that prohibit the storage of highly sensitive data outside the EU, he added.