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IT Industry Clashes with UK Government over Public Contracts

by Jeremy Coward

In the build up to the UK general election, the IT trade association TechUK has called out the UK government over its public procurement policies.

The trade body has accused the government of casting too much uncertainty over the procurement of its public contracts, mainly regarding alleged plans to reduce the number of large-scale IT contracts that the government outsources.

TechUK emphasised that contracts between the government and tech industry are responsible for a £100bn contribution to the UK economy and 500,000 jobs; further uncertainty could put both factors in a precarious situation.

This controversy was sparked in late 2014, when government digital chief Mike Brackan publically criticised the ‘tower model’ of outsourcing, whereby IT contracts are broken down and outsourced to a number of third party specialists. This stance was followed up in a Government Digital Service (GDS) blog post written by deputy director Alex Holmes, who stated that ‘the tower model is not condoned and not in line with government policy’.

The proceeding argument spilled over onto social media. TechUK pointed out that the tower model had previously been favoured by certain bodies in the public sector, and that it was not helpful that this nebulous stance had been announced in a blog post rather than in any official capacity.

Holmes responded on Twitter that he was only outlining current policy, to which TechUK retorted that the government’s policies clearly lacked the clarity which will be key to the success of future public-private outsourcing relationships.

Late in February, the UK government changed its procurement laws to be more in line with the EU, with a number of rule changes intended to simplify the bidding process and make public contracts more accessible to small and medium-sized enterprises (SMEs). It is yet to be seen whether these rule changes will also help the government achieve a level of clarity that TechUK and others in the IT outsourcing industry will find acceptable.

Holmes’s attack on the ‘tower model’ is reminiscent of plans outlined by Labour Policy Chief Jon Cruddas earlier in the year, who called for public contracts to go to companies with a ‘social purpose’ rather than those that are purely driven by profit.

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Related content:
The New EU Public Procurement Laws: What you need to know
Labour’s Outsourcing Plans Put Public Sector at Risk

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