Maude points to savings in response to select committee criticism

The minister said recent savings of more than £275m show the government's determination to renegotiate contracts and give SMEs a chance

Minister for the Cabinet Office Francis Maude has pointed to the savings that have resulted from the renegotiation of several large IT contracts in his response to a select committee report that criticised the government's handling of technology deals.

In January this year the Public Administration Select Committee's (PASC) released a report entitled "Government and IT – "a recipe for rip-offs": time for a new approach". In it, the committee slammed the government for what it perceived as a lack of progress over its ICT Strategic Implementation Plan.

Maude said recent savings of £275m from contract renegotiations demonstrate that progress is being made.

"We are committed to using ICT to drive delivery of more efficient, cost-effective public services – and we are already seeing the results.

"Just this month, we announced new agreements with two of the government's biggest IT services suppliers, Capgemini and Oracle, that will produce combined savings of more than £275m."

He added that these deals will pave the way for SMEs to win increased numbers of government contracts in future.

"These are just the latest in a series of contract renegotiations with large suppliers and show our unwavering determination to secure more flexible contracts, a better deal for taxpayers and a level playing field to allow smaller companies to enter the market."

One of the chief criticisms in the PASC report was that the government does not possess the industry knowledge necessary to ensure it negotiates value for money in large IT deals.

The government's response addressed this point, stating that it is now concluding more flexible contracts, and capturing pricing information more closely to enable simpler price comparisons to be made.

"Government is in the process of breaking the contractual lock-in which places the majority of government ICT business with a small group of major systems integrators. This process will remove exclusivity from the contracts, and rigorously record every contractual breach.

"It will also gather data centrally on the performance and pricing of all suppliers to provide a consolidated view of their competitiveness and performance. In parallel, government is consulting on new frameworks that will enable more agile procurement, and open the market to more SMEs."