Split big contracts to save: Maxwell

A rigorous review process for government IT contracts has encouraged government departments to engage with small and medium-sized enterprises and saved £500m over the past year.

Deputy government chief information officer Liam Maxwell told attendees at EHI Live 2012 that his focus is on looking at how the government departments can better spend their IT budgets.

The government spends 1% of GDP on IT so there is huge potential for savings. Maxwell said a more rigorous control process for government IT contracts – whereby all contracts worth more than £5m must be reviewed by the Cabinet Office – has saved £500m over the past year.

And he claimed billions more can be saved in the future. Key to this approach is encouraging and facilitating better engagement with SMEs.

Maxwell said SMEs are where most innovation comes from and are generally much cheaper and more flexible to deal with than large companies.

He said the Cabinet Office is doing what it can to change the “risk averse” culture in government and encourage departments to take risks with smaller and more agile suppliers.

He added that one key to this would be disaggregating “big black box” contracts into smaller parts to allow SMEs to participate in tenders.

Maxwell said that one department that went before the review process was planning to spend £4m on an IT project, but “effective disaggregation” reduced the cost to £40,000.

“It doesn’t take much to work out that dealing with SMEs will lead to huge savings in IT,” he said.

Maxwell conceded that a major cultural change is necessary for this new approach to take hold.

He also acknowledged that it will require an acceptance of potential failure, as innovation does not always succeed.

He further argued that open data and open standards will drive greater interoperability, which works to open up the market.

“Open data is absolutely fundamental to what this government is doing and what the health service is doing,” he said.

“We must free up data and enable people to do things in a localised way and core to that is use of open standards.”

The Cabinet Office’s public consultation on open standards is due to be published this autumn.

Maxwell said the government cannot legally mandate use of open standards, but will have a policy of “comply or explain”, whereby a convincing reason must be given for them not to be used. A new standards board will define what the standards are, he added.

Maxwell said that although he is sometimes described an “open source champion”, he is truly a champion of a fair playing field whereby open source solutions have the same opportunities as proprietary software.

Consulting director at Guildfoss Limited Malcolm Newbury asked Maxwell whether NHS Hack Day events could be incorporated into procurement review process.

He responded that it was a great idea and said he would treat the question as “homework” and come back to Newbury in three weeks’ time with an answer.