Whitehall reportedly extending outsourcing deals because of Brexit pressures

Written by Rebecca Hill on 11 April 2017 in News
News

The pressure on the civil service to deal with the UK’s exit from the European Union is leading to the extension of IT contracts, it has been reported

Departments might be signing up to existing contracts rather than seeking out new ones - Photo credit: Flickr, Sebastian Wiertz, CC BY 2.0

The government is reportedly resorting to automatic extension of outsourcing deals because civil servants are too heavily focused on Brexit to secure new or better-value tenders.

According to the Financial Times, the government is opting to roll over contracts - including ICT and digital deals - instead of negotiating new deals.

One source, a procurement adviser to the government, told the newspaper that more than 250 contracts are close to expiring or had already expired in 2016-17.

The adviser is quoted as saying that departments have “huge, expiring contracts” but that “Brexit has pushed them down the list of priorities so there are lots of extensions and re-extensions of existing deals”.


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The number of contracts up for renewal is also thought to be higher this year because many have been awarded on successive 10-year terms since outsourcing began in earnest under Margaret Thatcher’s government in 1986 and the Labour government in 2007.

The renewal of contracts with the private sector without reassessment goes against efforts the government has been making since a 2014 Cabinet Office ruling that departments should extricate themselves from long-term, high-value contracts with single suppliers.

The aim is to boost innovation in the delivery of public services by increasing competition, as well as making it possible for smaller businesses to access the public sector market through a different approach to procurement, for instance through the Digital Marketplace platform.

However, the government’s ability to procure digital services from SMEs has been criticised, and many remain sceptical that it will meet its target that, by 2020, £1 in every £3 spent on procurement will be spent on SMEs.

Tim Barnes, the founder of Rain Gods, an incubator for SMEs that want to work with government, recently told a conference that there was “no chance on earth” of the government fulfilling this pledge.

Other commentators have suggested that there is not enough digital talent within procurement teams to ensure that IT tenders are well-written, and for the government to ensure that there was more department-level tech expertise for procurement teams to access.

The Cabinet Office told the FT: “The government is focused on delivering our commitment to leave the EU and getting the very best deal for the UK, and we are equipping ourselves with the right people and the right skills across government to make this happen.”

Earlier this month, the former deputy head of policy at No10, Daniel Korski, announced the launch of a programme, GovStart, to help start-ups access the £320bn global govtech market. It will see companies receive guidance from Whitehall digital leaders and the former government chief procurement officer Bill Crothers.

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