Procurement teams the 'biggest enemy' to SMEs breaking in to government, says ex HMRC CIO

'There has been no fundamental DNA change, it has just been window dressing' - Specsavers CIO Phil Pavitt

The biggest enemy of SMEs trying to break into government IT are the procurement teams that work in Whitehall departments, claims former HMRC CIO Phil Pavitt.

Pavitt, who is now global CIO of Specsavers, worked at HMRC between 2009 and 2012, before moving to insurance firm Aviva in 2013.

In an interview with Computing, Pavitt explained that procurement teams in Whitehall departments and in central government have been talking up the use of SMEs rather than larger companies, but that this "talk" doesn't turn into actions.

"They talk about SMEs, and then every process and decision including G-Cloud goes against it. The biggest enemy of SMEs breaking into the government supply side is the procurement teams; they don't want it, they actively fight it, and you talk to SMEs who are trying to do business with government and it is almost as hard today as it was five years ago," he said.

Back in 2011, the government outlined how it would seek to achieve the government's objective to do 25 per cent of its business with SMEs, and Cabinet Office minister Francis Maude has continually stated that government is trying to create a level playing field with many of the larger IT companies.

G-Cloud was one of the initiatives that was supposed to help achieve this; it was set up as a framework that listed approved service providers. Public-sector organisations could procure cloud-based services from suppliers listed in the framework's CloudStore, cutting short the typically lengthy government tender process, and SMEs were in for a slice of the business.

But Pavitt believes that while G-Cloud gives SMEs a forum on which to advertise their services - very little is being spent with them. "If you find out how much of the £15bn-£16bn they spend on IT from SMEs, and I'll tell you - it's tens of millions, which is an absolute joke," he said.

The government has released statistics that suggested that 25 per cent or £11.4bn of its overall spend between 2013 and 2014 was with SMEs (that includes non-IT related contracts too). But the breakdown of the statistics it released was unclear. The G-Cloud itself has awarded more than 50 per cent of its spending to SMEs - but the £431m total that has been spent to the end of 2014 is not much in the grand scheme of things.

Pavitt continued: "Five years after making a huge statement on SMEs, and at HMRC, we did the first SME supplier ever to join - which was a huge battle by the way to get [through the procurement hurdles] - and the numbers that followed them are less than double-digit."

The reason for this, he said, was because the last thing procurement teams wanted was to do business with SMEs.

"Forget the hype, the last thing they want are SMEs in procurement in a department because the headache, the issue, the contract management, the overheads - they are just not geared up to do it, and most SMEs are giving up working with government," Pavitt said.

He added that G-Cloud was a great idea, but that much like the digital transformation in government, they have changed the front-end but not the (procurement) back-end.

"That's been very typical with the IT department under Liam Maxwell and the others: it has all been about the way it looks, there has been no fundamental DNA change, it has just been window dressing. It is the right window dressing, but it will never stick because they haven't changed the fundamentals," he concluded.