A new report from the National Audit Office (NAO) has criticised the UK Government’s digital and technology procurement processes, saying that as yet there is no strategic approach across departments to deal with the few large suppliers now dominating technology markets. 

The NAO’s report provides the first in-depth analysis of the Government’s plans for technology purchases since the unveiling of the AI Opportunities Action Plan, a multi-billion pound investment to build the infrastructure required to harness emerging technologies.

According to the study, the Government Commercial Function (GCF), a cross-government network consisting of around 6,000 civil servants working in procurement, does not have the digital skills needed to meet the distinct challenges of working within digital programmes and operations.

As evidence of this lack of experience, the report highlights that there are just 120 people in the Crown Commercial Service with a digital commercial focus, four people in the Central Digital and Data Office dedicated to digital commercial activity, and only fifteen in the GCF focused on the Government’s largest digital suppliers.

That’s despite over 28,000 people working within digital and data roles in government, amounting to around 5% of the civil service workforce in 2023.

According to the NAO, estimates from third parties suggests the Government spends at least £14 billion annually on digital procurement, however with a lack of information about the demand from specific departments, and very little available on supplier performance, the NAO said it is difficult for those in procurement to make decisions about future sourcing and contract awards. 

Added to this, the report argues that commercial teams within departments often make decisions on digital procurements without the benefit of digital expertise, with several chief digital and information officers (CDIOs) reportedly telling the NAO they can be excluded from advising on digital change procurements.

The NAO said that these digital specialists are also sidelined when it comes to engaging with digital suppliers, with contracts scoped and awarded without an assessment of project feasibility.

An examination of the figures around the delivery of some of the Government’s large digital programmes shows the scale of the problem. Looking at the National Law Enforcement Data Programme, for example, the NAO found a cost increase of 68% from original plans, with the project taking five years longer to deliver than initially thought.

Likewise, the Digital Services at the Border initiative saw costs spiral by 56%, with the work taking an extra three years.

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“A lack of digital and procurement capability within government has led to wasted expenditure and lack of progress on major digital transformation programmes,” said Gareth Davies, head of the NAO.

“Government needs to rethink how it procures digitally, including how to deal with “big tech” and global cloud providers that are bigger than governments themselves.

“The creation of the new digital centre of government provides an opportunity to make the systemic changes that are needed.”

In its recommendations, the NAO said that the Government should look to develop a plan to recruit and train more digital decision makers, set up better processes for departments to communicate their specific needs and demands, and ensure that CDIOs are made responsible for overseeing commercial contracting involving technology suppliers, supported by their own departmental digital commercial teams.