The public sector spending watchdog, the National Audit Office (NAO), just released a 55-page report highlighting how the government could save both time and money by improving its relationships with major tech suppliers. Some of these suppliers are so large they actually eclipse the size of the governments that engage with them. The report emphasizes that the government must learn from its past mistakes with big digital projects, which have often faced delays and ballooning costs.
The NAO suggests establishing a “cross-government sourcing strategy.” This would mean that commercial teams involved in procurement collaborate closely with groups that are shaping the government’s digital strategy. The Government Commercial Function (GCF), a network of around 6,000 civil servants, handles the procurement of government goods and services but only has 15 staff focused on the big tech relationships.
In a notable shift, the Labour government recently assigned the Department for Science, Innovation and Technology the responsibility for the Government Digital Service and the Central Digital and Data Office (CDDO) since taking office in July 2024. The CDDO has pointed out that digital procurement needs improvement, but it lacks the internal expertise to tackle the major challenges head-on. For the government to move forward, the NAO stresses the need for a fundamental reform to facilitate a strategic approach to digital procurement.
The report notes that although the CDDO and GCF teamed up to create a “digital playbook” in March 2022 to guide departments on technology purchases, it still needs more input to effectively tackle complex issues. Departments are also facing difficulties meeting their digital transformation goals due to challenges at the governmental level, creating a trickle-down effect that hampers their progress.
The report underscores that while the central government sets the overall direction, it’s the individual departments that award contracts and manage supplier relationships. This is where issues tend to arise. There currently isn’t a focused effort to address how departments can better utilize suppliers for their digital projects.
To improve this situation, the NAO recommends that departments team up with procurement specialists to refine their needs before entering the tender process. This would aid the government in building a more strategic approach to supplier engagement.
Gareth Davies, head of the NAO, noted that the government’s recent reorganization of its central digital functions is a chance to fix the issues identified in the report. He pointed out that the shortage of digital and procurement skills within government has led to wasted money and stalled digital projects. He stressed the importance of rethinking the approach to digital procurement, especially regarding interactions with massive tech companies. The establishment of a new digital center within government could pave the way for the necessary systemic changes.