Previously we reported on a call from the OFT for public sector buyers and suppliers to contact them about their experiences with regards to the level of competition within the sector.

Concerns were raised by respondents that particular companies appeared to have a large share of contracts; that there were high barriers to expansion for smaller companies; that it was difficult for the public sector to break away from current suppliers which had a detrimental impact on market entry

The investigation will examine two parts of the sector – commercial off-the-shelf software and outsourced IT. Nisha Arora, OFT senior director of services for infrastructure and public markets, said: “Information and communications technology is vital for the efficient and cost effective delivery of today’s public services and for many aspects of public service reform. “When competition works well, it can help drive down costs, encourage innovation and ultimately ensure that the taxpayer gets the best value for money”.

As IT accounts for a significant proportion of public sector expenditure, £13.8bn in 2011-12, this study into competitive effectiveness within the market is welcome news.