I have spent the day looking at the Public Administration Select Committee report on Government and IT, which was published this morning (which was difficult to miss given that it was reported by BBC and the broadsheets). My first observation was that it carried unfortunately a very negative title – ‘Government and IT – “a recipe for rip-offs”: time for a new approach’, which seemed to have been designed to grab the headlines. And it did just that! It is, therefore, not surprising that the press coverage of the report has been largely negative of government ICT and the industry.
However, I want to look at the positives of the report, before attempting to address some of the heavy-handed comments the committee has made.
What we liked….Intellect provided written evidence to the inquiry in January and appeared in front of the committee in March. When we gave evidence to the committee we made it clear that the IT industry supports the government’s ambition to deliver better public services through efficient use of IT. But we also emphasised that there were a number of key recommendations which we have been making for some time that government needs to adopt. We think that the PASC report includes some positive recommendations to improve public sector ICT that link back to areas we have highlighted before. Picking up on a small number of examples, we welcome the recommendations on the following points:
• IT must be fully integrated into policy making
• There is no such thing as an IT project – government must focus on what they want to achieve and not the technology.
• Government must become a more intelligent customer by recruiting people with the skills to procure and manage IT contracts.
• Strong leadership and accountability are required to drive change.
The committee’s view that the supplier base should be widened to offer more opportunities to SMEs is welcomed by Intellect which represents many SME businesses and actively support their involvement in government projects. However, I should also emphasise that we believe that best results for government can be achieved by a diverse ecosystem of different suppliers, large and small, doing different things. One of the biggest barriers for SMEs and new entrants to the market is the cost and length of procurement. By making procurement simpler, faster and cheaper, government can open up the market to many new players, including SMEs.
What concerned us…The allegations of anti-competitive behaviour and suggestion of an industry cartel cause great concern for us and our members. We strongly believe that such allegations are completely unfounded. In our evidence to the committee we made it clear that there was no evidence to support claims that the technology industry operates a cartel, and that such claims were inaccurate and misleading.
We were also very concerned about the suggestion that Whitehall’s approach to IT had been a “recipe for rip-offs”. Those who know the industry well will know that doing business with government can be costly because of the long procurement processes involved and government customers’ non-standard requirements. Pricing therefore inevitably reflects the fact that government over-prescribes its requirements. For this to change, the government needs to make radical changes to the procurement process to avoid the impression of overcharging.
On the point that the market is dominated by a small number of large companies, we feel that report paints a “black and white” picture of the market in terms of how it portrays large and small suppliers, when in reality this is a very complex area with companies of all sizes working in partnerships and consortia.
Alistair Hardie, who is the SME Champion on Intellect’s Board, and MD of an SME, told me earlier today: “On behalf of our SME members I don’t believe SME’s are disadvantaged by large ICT companies in any unfair way at all. As we all know, many public sector procurement practices remain SME unfriendly but that is not the fault of large ICT companies.” On accusations of cartel behaviour, he told me “SME ICT companies don’t see any sign of large companies colluding. Quite the opposite, we see them in fierce competition.”
So…As suppliers, it is in our industry’s interest that the government is a happy customer. This report certainly doesn’t give the impression that we’re at that point. But it also acknowledges that the potential rewards of using technology to reform services are enormous. Now, it’s up to government, as well as large and small companies alike to step up to the challenge and work together to help the government drive reform.