Page last updated at 10:42 GMT, Tuesday, 27 January 2009

Tories consider IT contract cap

Computer keyboard
The NHS computer system has been hit by costly delays

The Conservatives are considering plans for a 100m cap on government IT contracts to prevent "white elephants" such as the NHS computer system.

Instead of awarding long-term contracts to large IT companies they could open up the procurement process to smaller firms using "open source" software.

A report drawn up for Shadow Chancellor George Osborne claims potential savings could reach 600m a year.

The Tories say Labour has wasted billions on "catastrophic" IT projects.

The report, by Dr Mark Thompson, of Judge Business School at Cambridge University, is being studied by the shadow chancellor as part of the Conservatives' detailed preparations for government.

'Modernising government'

Mr Osborne said: "The Conservative Party is looking to the future. We have led the debate on using open source software in government, and I'm delighted that Dr Mark Thompson has come forward with these detailed recommendations.

"These proposals aren't just about saving money - they're about modernising government, making the public sector more innovative and improving public services."

He said he wanted to hear views from the public and the IT industry about the proposals.

The Conservatives claim the government wasted billions on failed IT projects, including the computerised patient record system for the NHS in England, the cost of which has soared from an initial estimate of 2bn to 12bn, and which has been subject to a series of delays.

The Committee on Public Accounts earlier threw fresh doubt on the 2015 deadline for the project.

The government has scaled back some IT projects in recent years. In 2006, it scrapped plans for a single multi-billion pound system for the national identity register, with the information to be held on three existing, separate databases instead.

But the Conservatives say millions more could be saved by moving away from the current government practice of outsourcing IT projects to a small number of large contractors.

'Level playing field'

Dr Thompson's report calls for an "open" system of IT procurement, involving a much wider range of contractors, including innovative start-up companies.

It recommends the adoption of open data standards across government, in effect creating a common "language" for government IT systems.

This would reduce licensing costs and free government bodies from long-term monopoly supply contracts, the report says.

"This means that the UK government should never again need to sign an IT software contract worth over 100m - so no more IT "white elephants," it adds.

Dr Thompson said his report "shows how government could save hundreds of millions of pounds a year by creating a more open IT procurement process - including levelling the playing field for open source software".

"It isn't rocket science - it's about creating a modern and efficient procurement system. Governments and companies around the world are making use of open source software, and we could achieve much more here in the UK," he added.



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