A PAC study claims that key departments do not have a handle on spending data and other information, while departments lack necessary skills, and major and entrenched challenges are underestimated

A major report has concluded that government faces a “mountain to climb” in addressing significant challenges with tech procurement across Whitehall – which, in turn, are providing a barrier to digital transformation.

Newly published research from parliament’s Public Accounts Committee also finds that “the centre of government does not yet recognise the scale of reform required to address long-standing issues in digital procurement”.

This lack of recognition – the first of the report’s six core conclusions – is evidenced by the fact that, of the 6,000 people that comprise the cross-department Government Commercial Function (GCF), there are “only 15 people dedicated to the full–time management of technology suppliers”.

The Cabinet Office is home to GCF, while a newly created Digital Commercial Centre of Excellence (DCCoE) is housed in the Department for Science, Innovation and Technology, where it will work closely with the expanded Government Digital Service. To address the “untenable” lack of hands-on management for tech providers, MPs recommend that the two departments “should urgently clarify their respective roles within digital procurement, including responsibilities around decision–making and areas of accountability” for improvement.

More information should be provided via a Treasury Minute response outlining how the Cabinet Office and DSIT “will ensure that GCF and GDS operate on digital commercial matters both individually and jointly, and provide clarity on who leads on relationship management with digital suppliers”.

Perhaps the most damning of the committee’s conclusions is that “government’s ability to get the best deals with technology suppliers is being hampered by its lack of knowledge of what it is spending or its future needs”.

While Whitehall’s best estimate is that departments collectively spend about £14bn each on digital deals, government “cannot say for certain as it has no central record of this spending [and] also lacks reliable or comprehensive data on its overall pipeline of future demand for digital services and lacks the ability to evaluate this against suppliers’ appetite to provide those services”.

6,000
Number of professionals that constitute the Government Commercial Function

15
Number of commercial experts exclusively dedicated to managing technology suppliers

£14bn
Approximate annual government spending on digital

To address this, the committee recommends that DSIT and the Cabinet Office set out a vision of how they “will ensure that [government] has the data and the capability – systems, processes, people – it needs to make more informed decisions about where and how government spends with technology suppliers”. This information, which MPs ask to be provided by autumn, should include information on current spending and “the pipeline of supply and demand”.

Another critical conclusion of the study is that the GCF’s “current plans for training to build digital commercial expertise across the civil service are insufficient to bring about the transformative change needed to improve government’s digital commercial activity”.

The Cabinet Office and DSIT have been asked to provide the committee – within the next six months – with information on how they will try and “ensure that departments have the digital commercial skills and expertise they need”. Along with this detail, the departments should “explicitly state how they will overhaul the ratio of digital commercial experts relative to the wider commercial function and ensure that the views of digital experts are given due prominence”.

Another of the committee’s findings concerns the “many expectations” being placed on the new DCCoE. A lack of personnel is again cited as a problem, with the report noting that the unit “will have just 24 experts to undertake its roles, compared to 6,000 mainly general commercial people working across government”.

MPs ask that the Cabinet Office and DSIT also use a Treasury Minute response to provide more info on “what the Digital Commercial Centre of Excellence is going to do to address the problems with digital commercial activity as well as its published aims for SMEs and startups; and how it will balance its resources and time between activity facing government and suppliers respectively”.

Skills challenges
A further finding of the report is that the two departments’ work across government focused on “preparing for the opportunities and risks presented by new technologies” is not tied in with work on tackling related “digital procurement challenges”.

The report calls on the Cabinet Office and DSIT to “develop a comprehensive plan for securing the digital commercial skills that government needs”. This should include “assessments of priority capability needs, existing capability and skills gaps”.  In the next three months, the duo of departments are also asked to instruct MPs on how they could improve an existing Digital, Data and Technology Playbook to make sure that the guidance is “pitched at a sufficient level of detail to be of practical help and cover the whole commercial lifecycle, and [also] who will be responsible for updating it regularly”.

The final of the report’s conclusions is that, in is vision for achieving efficiencies by operating in a more joined-up way,  “government is underestimating how difficult it will be to consolidate its buying power centrally when procuring digital technology across government”.

The report adds: “Historically, government has sought to exercise buying power through competition between technology suppliers. But the digital technology market is increasingly being dominated by a small number of very large suppliers, giving the government limited choice.”

To address this problem, DSIT and the Cabinet Office are asked to “design a suitable commercial construct moving from the current conceptual level to a more detailed explanation of how things should work”.

PAC chair Sir Geoffrey Clifton-Brown said that “the government is talking a big game in digitally evolving Whitehall” – but that such talk may not be matched by the necessary pace and reach of transformation.

“Our committee has long called for digital professionals to take their rightful place at the top table both in management and on the supervisory boards of Departments themselves, guiding and shaping key conversations on AI, cyber security, and overall policy delivery,” he said. “How digital services are bought in from the private sector is the very foundation of this work.”

“Government has sought to exercise buying power through competition between technology suppliers – but the digital technology market is increasingly being dominated by a small number of very large suppliers, giving the government limited choice.”

PAC report

The PAC chief added: “Government ambitions exist in a context in which the field is littered with failed digital transformation projects which suffered from the same systemic issues – a lack of in-house skills, a lack of effective cross-governmental collaboration, a lack of future-proofed infrastructure. Our report provides a template for government on how to sharpen its approach to the challenges of a digital landscape that poses the twin challenges of the dominance of a few big players, and moment-by-moment change. Without seizing the opportunity to deliver the urgently needed reforms laid out in our report, government’s noble digital aspirations are likely to remain unfulfilled, and productivity improvements in the public sector will be delivered sub-optimally.”

In response to the report, a government spokesperson said: “We welcome the recommendations in the report and we have recently implemented a number of significant changes to better coordinate, enhance and harness the capabilities of our digital and commercial functions. This includes the launch of the Digital Commercial Centre of Excellence, and a new Central Digital Platform to improve digital procurement and data across government.”

The Cabinet Office also flagged up other recent developments, including the newly announced National Digital Exchange to support tech procurement, the Central Digital Platform data system, and a digital sourcing strategy currently being created by DCCoE.

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