UK ‘lacks understanding’ on tech procurement as taxpayer foots bill
The UK’s approach to technology procurement ‘lacks understanding’, resulting in costly setbacks whilst leaving its public services on outdated systems.
The government has accumulated 29 years of delays across major IT projects and £3bn in cost overruns, according to a recent report by the National Audit Office (NAO).
This comes as Keir Starmer recently launched the UK’s AI Opportunities Action plan, which pledges to inject millions into AI to boost economic growth.
The watchdog warned that efficiency and transparency need to improve to avoid pitfalls for businesses in the sector.
Despite the £14bn spent a year on digital procurement, taxpayer money has been wasted on outdated strategies and poor supplier engagement.
NAO’s report showed a recurring failure from the government to learn from past mistakes in large-scale digital transformation projects.
It has relied too heavily on outdated, generalist outsourcing models, which are unsuited to modern technology demand.
NHS and MOD
This has hampered efforts to modernise public services.
For example, projects like the dismantled NHS national programme for IT resulted in billions of pounds wasted and a failure to deliver promised outcomes.
Its cost ballooned from its original budget of £2.3bn, to approximately £12.7bn over the 11 year course before ultimately being abandoned.
The Ministry of Defence (MoD) is frequently cited for cost overruns for issuers with defence communications infrastructure or outdated legacy systems.
HMRC has also struggled with digital projects like implementing systems to modernise parts of its operation.
Gareth Davies, head of NAO, said: “A lack of digital and procurement capability within government has led to wasted expenditure and lack of progress on major digital transformation programmes.”
“The government needs to rethink how it procures digitally”, he continued, by engaging with improved technology.
A government spokesperson told CityAM, “We fully support the findings and recommendations outlined in this report which clearly highlights the situation we have inherited from the previous government. We recognise the need for improvement in how we engage with technology suppliers and will take immediate action to address these challenges.”
“In the coming weeks, we will set out steps to enhance digital skills, strengthen procurement practices, and ensure more effective collaboration with suppliers through the new Digital Centre of Government.”
This would help unlock significant capital by establishing a cross – government sourcing strategy to address challenges which may come with working with dominant Big Tech companies and cloud providers.