Maude lets SMEs bid for HMRC IT

In an interview with MT, cabinet office minister Francis Maude said opening up a government IT contract to small businesses will shake things up. Feels familiar...

by Emma Haslett
Last Updated: 06 Nov 2012

The Government has been falling over itself to ingratiate itself with small businesses of late - the latest of which is the announcement that it's renegotiated its Aspire IT contract between HM Revenue & Customs and a group of IT contractors led by Capgemini, to give SMEs the chance to tender for the work. The contract was originally signed in 2004, and was worth £2.8bn over 10 years. But in an interview with MT at the Digital London conference today, Cabinet Office minister Francis Maude said opening up the process to small businesses would shake things up. Easier said than done, though, surely?

Maude said that by renegotiating the contract, the Government will make £200m of savings 'from cost reductions and price reduction', as he put it. 'But more importantly what we have done is to agree that there's no further exclusivity... which will open up opportunities for smaller, more innovative suppliers'.

It's still not completely clear how much of the new contract will necessarily go out to SMEs. After all, as Maude himself admitted, 'Capgemini will be able to compete for the new work, and they will have all the advantages of having the inside track. Knowing the Revenue's business very well, they'll be well-placed to compete effectively.' So this could be nothing more than a very elaborate PR stunt.

This isn't the first time - and probably won't be the last - that a government (indeed, this government) has tried to get small businesses involved in public procurement. In fact, Maude was keen to push the benefits to SMEs of Cloudstore, the new site where Government departments can use private sector cloud computing services on a 'pay as you go' basis. Maude reckons it's been a roaring success: 'more than half [of the suppliers on the service] are SMEs. One of them said to me at an event last week that he couldn't believe how easy it was for us to get on the Cloudstore'. Impressive.

Unfortunately, that doesn't seem to be the experience across the board. As Martino Corbelli, chief customer officer at cloud computing firm Star told us: '[Cloudstore] is like being on the VIP guest list to a red carpet even but not knowing if they'll let you in on the door because they didn't tell you the dress code. I'm wearing fashionable shoes but will they only let people in with brogues on?' In other words: no one's quite sure what the Government is after.

So its intentions might be good, but critics could be forgiven for being sceptical about the Government's plans to open up its procurement process. The problem is that, as anyone with a basic grasp of economies of scale could tell you, having one large supplier is much cheaper than lots of little ones. Maude, though, is optimistic. 'It's never a good idea to be in the hands of a monopoly supplier'. Fair enough.

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