UK pays £16bn to oursourcers

Government spending on IT outsourcing will more than treble to £16.5bn in the next two years, Computing can reveal.

Whitehall figures show deals worth more than £4.5bn have been signed since the government came to power in 1997.

But the total does not include a string of high-profile, high-value deals currently in procurement, including:

• The Department of Food and Rural Affairs is looking for a supplier to manage its infrastructure for an estimated £85m a year for 10 years
• The National Programme for NHS IT has a budget of £2.3bn over the next three years
• The £5bn Defence Information Infrastructure deal is due to be signed at the end of 2004
• The Inland Revenue's £4bn Aspire project comes into effect in July, superceding the NIRS2 national insurance contract and the existing infrastructure deal.

  Computing revealed earlier this year that £1.5bn has been wasted on cancelled and over-budget projects since 1997 (Computing, 13 March).

  With so much more money now on the table, the government must learn from previous project failures.

  The most important thing is to work with users, says Conservative MP Howard Flight, who asked a series of parliamentary questions about Whitehall IT.

  'There is not as yet any indication that the public sector has learned how to manage IT contracts more successfully to avoid massive overruns and failure,' he said.

  'The private sector has learned that technology projects work if you take a bottom-up approach - working with people to find out what they need from IT.'

  Government IT expert Jim Norton says the Gateway monitoring process needs to be expanded.

  'The scope ought to be increased to audit the people dimension of projects,' he said.

  'Are training, internal communications, the inevitable short-term productivity reduction, and fallback strategies properly identified and budgeted?'

  For the full breakdown of government outsourcing deals since 1997, click here.