Given that central government is ‘approximately 65%’ outsourced this is one of the most critical aspects to the strategy – ensuring government’s IT strategic suppliers actually deliver IT successfully. It’s also the one where, evidently, there’s been the most difficulty and the least room for maneouvre.

To put the above into context:

In 2004, ministers set a target for 70% of major Government IT projects to be delivered ‘on time, on budget and to specification and budget’ by the following year(see http://www.egovmonitor.com/node/1320). This represented a 2-3x increase in performance levels at the time.

In 2007, a central government CIO is said to have disclosed that only 30% of projects were compliant. (See: http://bit.ly/5bRemC). In May 2009, the Transformational Government annual report stated that only 55% of projects were on target, which was a major improvement but still leaves nearly half falling below requirements.

At the same time, according to the report, Government IT spending has increased by £1.24bn since the start of the Transformational Government strategy in 2005/6 – the biggest contributor to this rise being the Ministry of Defence (presumably owing largely to UK military operations).

This is despite the Government’s CIO Council’s target to reduce government IT costs by 20% by 2011.

This year’s figures didn’t include IT expenditure for the Scottish and Welsh public sectors, though the previous report estimated Wales’ spending last year at £225m and Scotland’s at £600m in 2005/06. If these to be actually included in the overall sum, UK government IT expenditure would be an estimated £14.5bn.

So while government IT costs rise, the performance of key IT government suppliers falls.

Research by the Government’s CIO Council on the performance of the Government’s ‘top 13 IT suppliers’ published in the last T-Gov annual report shows around 70% are rated ‘not good’.

From January to June 2008, overall only a quarter of these strategic suppliers were rated ‘good’ – compared with a third a year ago – while the very small percentage classed as ‘excellent’ showed no change from last year.

It adds that over 37% of public sector IT expenditure – equivalent to some £4.7bn per year – is shared between just 13 companies. According to the strategy above, this equates to around 150 contracts which need to be managed.

While this section briefly touches on the problems and the solutions, I’d suggest more radical steps are now required to bring about a step-change in supplier performance and to better manage the key spend.