Central government spent £ 4.4bn on IT in 2020

Departments spent £ 4.4bn on technology in 2020, showing an increase in spending from £ 4.2bn in 2019, according to a report by Tussell.

The central government IT market report found that HM Revenue and Customs (HMRC), which has several major tech programs underway, including Making Tax Digital, spent £ 3.5bn on IT between 2016 and 2020.

In January 2021, the Public Accounts Committee (PAC) criticized the ministry for spending too much money to fix old legacy IT systems, and the ministry secured government funding of £ 268million to modernize its IT during the November 2020 expenditure review.

Data from the Tussell report revealed that HMRC “appears to be more dependent on its main IT vendor” than other departments, having disbursed £ 1.9bn between 2016-2020 for vendor Capgemini.

The department has a long history with the supplier, stretching back decades. HMRC worked with Capgemini on what was previously known as the Aspire contract, but as part of a contract extension in 2019, it changed the way it works with the service provider to support its technology sourcing program. .

Capgemini primarily provides data, digital and cloud technologies, as well as application management services, and its extension with HMRC expires this year.

HMRC also spent £ 283million on another major supplier, Accenture, between 2016 and 2020, according to Tussell.

Atos also figures prominently in top departmental spending, with the Department for Work and Pensions (DWP) spending £ 791m on Atos between 2016-2020 and the Department of Justice (MoJ) spending £ 395m. pounds sterling for the supplier during the same period.

Overall, the top 10 government vendors generated over 60% of total departmental IT spending between 2016 and 2020.

The period saw significant IT spending, with the government spending £ 2.46bn on Capgemini, £ 2.41bn on Atos and £ 2.31bn on Capita. Other major vendors who have raised government money during this time include IBM, DXC Technology, Accenture, CGI, Sopra Steria, and Oracle.

The Tussell report added that these strategic suppliers are “a crucial route to market for small and medium enterprises”.

Despite significant expenses for large IT companies, data from Tussell also shows that departments are committed to disaggregating large contracts. The market share of the top 10 IT vendors has declined significantly over the past few years, dropping from over 70% market share based on spend value in 2016 to 44% in 2020. Mid-cap IT companies were the main beneficiaries. market changes, while SMEs saw their market share increase slightly, from around 5% in 2016 to 15% in 2020.

Tussell’s data revealed that most of the IT-related contracts awarded by the central government have gone through 10 different executives since 2020.

The most popular remain the latest iterations of G-Cloud, G-Cloud 11 and 12, which saw 389 contracts awarded, worth a total of £ 469million and 271 contracts worth £ 398million. respectively since 2020. Tussell’s data also shows that more over the next 18 months, nearly 6,000 government contracts worth a total of £ 5 billion are set to expire.


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