UK knifes 'bloated and wasteful' IT deals

The British government has issued strict new guidelines for its information technology procurement, limiting the size of contracts and broadening the range of approved suppliers.

Francis Maude.

Under the so-called 'red lines' published over the weekend by the minister for the cabinet office Francis Maude, there will be no UK government contracts over £100 million (A$190 million) in value unless there is an "exceptional reason".

Contracts will no longer be automatically extended and will not be continued by the government unless there is a compelling reason, Maude's guidelines state. 

The UK government will also not sign hosting contracts lasting more than two years as part of the red lines policy.

Companies that already have been signed up to provide services will be barred from systems integration work if it is in the same part of the government, according to the guidelines.

Large government IT project failures such as the abandoned National Health Service (NHS) patient record system that has cost the taxpayer around £10 billion (A$19 billion) so far, along with smaller ones such as the Ministry of Defence's malfunctioning IT recruitment portal for the Army triggered the creation of the new guidelines.

The thinking behind the 'red lines' is to ensure more competition from a greater range of suppliers, according to Maude.

Maude has been on the warpath against what he terms as "wasteful and bloated government IT contracts" and claims that smarter purchasing saved taxpayers £3.8 billion between 2012 and 2013.

"We are creating a more competitve and open market for technology that opens up opportunity for big and small firms. These red lines will ensure the government gets the best technology at the best price and we will be unashamedly militant about enforcing them to provide value for hard-working taxpayers," Maude said.

A further £500 million was saved by better controlled IT spending and digitisation of services being progressed, Maude said.