Whitehall tries to get smaller businesses a piece of the action
Just 11 companies provide around 80 per cent of government IT in the UK, it has been revealed, as Whitehall attempts to boost the number of small businesses providing technology to the public sector.
It is all part of an attempt to reduce the dominance of a small number of large companies.
The public sector accounts for 55 per cent of IT spending in the UK. But in 2002-03 just five companies accounted for 60 per cent of government IT contracts.
These figures come from the Public Accounts Committee (PAC) earlier this year, though the PAC reckons the supplier base has recently broadened so that 11 companies now provide 80 per cent of government IT.
According to the Office of Government Commerce (OGC) those 11 companies are (click on each name for more details) Accenture, Atos Origin, BT, Capgemini , Capita, CSC , EDS, Fujitsu Services, IBM, LogicaCMG and Siemens .
The OGC wouldn't reveal to silicon.com how much the government spends with each of the companies listed.
The government is trying to get more small companies involved with public sector tech projects, according to the OGC, which is responsible for IT procurement.
It is setting up a National Opportunities Portal to advertise government IT contracts that might otherwise be missed by smaller suppliers.
The portal will become the main gateway for businesses looking to supply goods and services under £100,000 - including technology - to local and central government.
It is hoped that larger suppliers - who usually win public sector mega-contracts - can also be persuaded to use the site to attract SME suppliers as subcontractors. The portal is intended to go live by the end of the year.
An OGC spokesman told silicon.com: "We are very keen to see more small and medium-sized IT suppliers coming into the marketplace and it's not the government's intention to limit suppliers either by size or number."
MPs have called for the government to procure more of its IT from UK companies.
Labour MP Chris Bryant told the House of Commons: "The government are probably the biggest commissioner of IT in the country, yet all too often we end up buying American products off the shelf. We could build an innovative and imaginative UK IT industry if we were able to invest more sensibly and creatively."
Click here for more details of each of the top suppliers to government.Accenture
Accenture won the two Local Service Provider (LSP) contracts with the NHS, which are valued at £1.1bn and £973m respectively, in December 2003.
As part of those deals Accenture is responsible for designing, implementing and operating the new IT infrastructure required in those regions to integrate with the national electronic patient record system. Other clients in the UK include The Medicines Control Agency and e-procurement projects at the DVLA and Royal Mail.
Top contracts include being the partner for NHSScotland, managing its IT infrastructure and providing systems integration services. It also manages the IT infrastructure and provides technical and business consulting for the Metropolitan Police. A £78m deal signed with the Vehicle and Operator Services Agency will see it redeveloping the agencies IT infrastructure, including knowledge management and wireless mobile services. Atos also has a £46m contract with the Ministry of Defence to support the Defence Logisitics Organisation in achieving savings from procurement of goods and services.
Recent big contract wins for BT include a £1.5bn five-year contract extension to deliver the Defence Fixed Telecommunications System for the UK armed forces, which was signed this year. It is also providing a new communications system to the National Air Traffic Services. Deals with local authorities include those at Liverpool City Council, Rotherham Metropolitan Borough Council and Suffolk County Council.
John Anderson, managing director of BT Government, said: "We have an overall turnover of £1.7bn. By 2006-7 wants that to grow to £2bn.
"The big market is going to be local authorities because there's still a huge amount of change and rationalisation to do there."
But he added: "It's easier to make a commercial return from the commercial sector than from the public sector. The terms and conditions are getting more onerous and they are trying to transfer more risk to the supplier and there's some risk that you can't really manage."
Cap Gemini won the £3bn job to transform IT services at HM Revenue and Customs under the Aspire contract - replacing incumbent EDS. It is also working on criminal Justice IT projects and implementing new customer services operations for Westminster.
The company is also implementing new business processes and systems within devolved administrations such as Common Agriculture Payments for the National Assembly for Wales.
Top public sector deals that Capita is involved with include the London Congestion Charging scheme, TV licensing and the Criminal Records Bureau, which is expected to issue 2.7 million records this year. The company collects £1.4bn of Business Rates on behalf of 11 local authorities, administers Council Tax on behalf of 10 local authorities - worth in excess of £507m - and last year paid out £660m in Housing and Council Tax benefits on behalf of nine local authorities.
CSC is one of the Local Service Providers for the government's Connecting for Health programme, part of an alliance awarded a 10-year £973m contract for the North West and West Midlands. Another CSC-led alliance was also awarded a 10-year, £196 million IT diagnostic imaging contract with the NHS to design, build and operate a new Picture Archiving and Communications System across the same area. In 2003 Royal Mail Group outsourced its IT to the CSC-led Prism Alliance (which includes BT and Xansa) in a 10-year £1.5bn deal.
EDS bounced back from the loss of its Inland Revenue contract to win the £4bn Defence Information Infrastructure (DII) outsourcing contract for the Ministry of Defence, one of the biggest outsourcing deals ever.
It has also recently won a £39m deal to develop the technology to create a single view of offenders as they progress through the UK justice system, and is working with the Prison Service on a technology upgrade that will see it moving PCs and laptops to Windows XP. Recently it also won a £15m outsourcing deal to manage the desktop infrastructure at Cheshire County Council.
Major contracts include a £896m deal to modernise the NHS IT in the southern region. With the Post Office it has a deal until 2010 to maintain 38,000 terminals in 17,000 branches which process 2.4 billion transactions per year. It also has a 10-year £500m deal with the Home Office to deliver infrastructure services and consultancy to 14,000 users. Local government customers include Bolton Metropolitan Borough Council, London Borough of Harrow and Newcastle City Council. The company was formerly called ICL.
For IBM, including its Global Services division, major contracts include those with Bradford Council, Defra, the Department for Work and Pensions, the DVLA, the Land Registry, the MoD and Surrey County Council.
Nicola Bolton, director of government business IBM, is confident that there is still more demand for IT in the public sector: "For IBM the public sector is one of our two focus industries. We've had a fantastically successful last couple of years in the UK public sector. We are looking to double the business over the next three years in the UK."
Looking forward, areas such as road charging, homeland security and identity and joined up infrastructure will be key areas for IBM, she said.
LogicaCMG claims 71 customers across the public sector, covering 291,000 employees. Major deals include contracts with Cardiff Council, the Crown Prosecution Service, the Health and Safety Executive, and the Metropolitan Police.
The company has also designed, built and maintained two generations of Ernie - the machine that picks more than one million National Savings and investment premium bond winners each month.
It supplies payroll services to 62 public sector customers representing 125 organisations and 232,000 employees - around a third of the market.
Big recent contracts for Siemens Business Services include a £60m contract with Transport for London to provide camera and automatic number plate recognition for the western extension of the central London Congestion Charging Scheme. It has another £120m contract to track and monitor London's 8,000 buses using satellite navigation technology. It is also digitising more than 250 million birth, marriage and death certificates from 1837 to the present day for the Office for National Statistics. Other mega-deals include a £400m deal with National Savings and Investments, and a £2bn technology deal with the BBC.