Just 15 Buyers Are In Charge Of £14b In Uk Central Government Tech Spending

The UK government employs just 15 commercial staff with direct expertise in digital procurement dedicated to dealing with the largest technical suppliers, according to a Parliamentary spending watchdog.

As it prepares to implement a set of ambitious plans to improve efficiency with digital technology, the central government needs to overhaul the skills it relies on to manage commercial relationships with tech suppliers, against a backdrop of “poor outcomes in its attempts to modernize and make government more efficient,” a report from the Public Accounts Committee said.

The government spends at least £14 billion ($19 billion) annually with technology suppliers. While there are 6,000 people with mixed commercial skills in Whitehall, “only 15 people [are] dedicated to the full–time management of technology suppliers…” the report revealed.

The PAC added: “Given the pace of digital technological change needed to adopt AI and the significant shift from legacy systems to modern replacements, this number is simply not tenable.”

In January, the administration unveiled a “blueprint for a modern digital government,” outlining ambitious plans to improve government efficiency. It also created a Digital Commercial Centre of Excellence “to help public sector organizations negotiate costly contracts together to save money, and open opportunities for smaller UK startups and scale-ups to drive economic growth and create jobs.”

However, the PAC report said the Government Commercial Function (GCF), which is accountable to the Cabinet Office, leads public procurement policy while the Government Digital Service (GDS), which is accountable to the Department for Science, Innovation and Technology (DSIT), is responsible for government’s digital and data function “but it does not have a formal role in respect of procurement.”

“The GCF and GDS have important roles to play in improving government’s digital procurement, as will the new Digital Commercial Centre of Excellence that the government is setting up. GDS has not had formal responsibility for digital procurement in the past. This needs to change, but GCF and GDS have not yet set out how they will make this happen. With different parts of the Cabinet Office and DSIT responsible for different elements of digital procurement, and the new Centre of Excellence reporting to both Departments, it is also not yet clear who is ultimately responsible for delivering the improvements to digital commercial activity that government needs to make,” the report said.

“We are concerned as to whether DSIT will have the authority to instill the change that is needed in most departments,” it added.

The committee of MPs called on the government to “urgently clarify” the roles of different teams responsible for digital procurement.

The Committee implied there was potential for confusion over the role of the new Digital Commercial Centre of Excellence. While its explicit objectives are to identify opportunities for reform and improvements and help start-ups and SMEs get a foothold on government contract, Cabinet Office and DSIT seem to think it would be “fully harnessing the capability of the digital and commercial functions; ensuring better data on technology spending; leveraging government’s buying power with technology suppliers; helping departments to optimise their use of the cloud; and digitally upskilling commercial staff across government.”

“The Centre of Excellence will have just 24 experts to undertake its roles, compared to 6,000 mainly general commercial people working across government,” the PAC report said.

When buying from dominant “big tech” suppliers, the Cabinet Office told MPs it was a “complex and big–scale set of challenges” and that the picture was “mixed.”

Although it has a team of 20 “incredibly senior, experienced people” specialized in making deals with the largest suppliers to help departments, their use was “clearly dependent and clearly inconsistent.”

Training for civil servants in commercial roles lacks elements for managing technology and digital spending. “The GCF accepts that more could be done but has not yet set out what that would look like in practice,” the report said.

In February, Andrew Forzani, chief commercial officer in the Cabinet Office, told the PAC that if the government wanted to use its spending power to strike better deals with the top cloud providers, individual departments needed to align their requirements.

In December 2023, the Home Office awarded market leader AWS a £450 million ($609 million) contract for cloud services over three years. The deal replaced an earlier £120 million ($162 million) deal awarded in December 2020.

Challenged about why the value of the deal had increased, Forzani said: “There is limited choice. If you want to leverage government purchasing power for hosting, you need to get a number of departments aligned around requirements. That is very challenging to do.”

In April last year, The Register revealed that the government had admitted its negotiating power over billions of pounds of cloud infrastructure spending had been inhibited by vendor lock-in.

A document from the Cabinet Office’s Central Digital & Data Office – before it was rolled into the Department for Science, Innovation & Technology – said the “UK government’s current approach to cloud adoption and management across its departments faces several challenges,” which together “risk concentration and vendor lock-in that inhibit UK government’s negotiating power over the cloud vendors.” ®

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