An investigation into the competitiveness of the multi-billion pound government IT market has been launched by the Office of Fair Trading. The OFT is seeking input from firms in a market where the top 20 suppliers received £10.4bn for their services.

The OFT want smaller companies to inform it about barriers they have faced competing in the sector, which has repeatedly been criticised in the past for an over-reliance on a small number of large companies. This surely begs the question how can value for money or effective service have been demonstrated, when there would appear to be a closed market in operation?

ICT plays a crucial role in the delivery of public services ranging from schools, to hospitals and the police, the OFT said, adding that healthy competition was important to drive down costs, drive up efficiency and promote innovation.

The OFT said it wanted to find out which suppliers tried to limit the interoperability and use of competitor systems with their own.

Clive Maxwell, OFT chief executive, said: ‘This work demonstrates a continued focus by the OFT on markets related to public services. We want to hear both from industry suppliers and public sector users about how competition in this market works, any problems that they have experienced, and how it could be made to work better.”

Procurement initiatives such as the pan-government G-Cloud framework have sought to open up procurement opportunities to smaller firms, but the G-Cloud still only accounts for a very small fraction of the billions spent on public sector ICT. Some would say that IT giants have been allowed to create a stagnant public sector by their dominance and that this investigation is long overdue. Whether the outcome of the investigation will make any difference to the way that the public sector procure ICT in the future remains to be seen. Or whether they will through fear of non-compatibility or the unknown of using new creative, cutting edge technology firms, decide to stay with the same large suppliers. All that is certain is that something must be done, to re-invigorate this market place and end the monopoly that has been built up.

One thought on “Office Fair Trading Launch Investigation into Government IT Market

  1. Anthony says:

    the main obstacle to change in the mix of supplie rs is proprietary interfaces which are used by the large incumbent suppliers to prevent new competitors from entering this marketplace. Unless there is a change to the existing IP regime then it will be hard to bring in new suppliers. Also government depts are notoriously slow to refresh their supply arrangements in part because of the heavy regulatory burden of complying with EU and UK procurement regulations which entail time and costly resources.

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