UK government IT spending is "inexcusably wasteful" as millions lost maintaining outdated systems

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The UK is spending vast sums of public money on maintaining outdated and cumbersome IT systems, according to the National Audit Office (NAO). 

In his annual speech to Parliament, Gareth Davies, the NAO auditor general, is set to highlight five areas in which tens of billions of pounds are being wasted by the government.

Key areas expected to be highlighted include IT spending, major infrastructure projects such as HS2 and the new hospitals programme, buildings management, purchasing, and reducing fraud and error.

IT spending in particular is set to be a major focus, which the NAO said has rapidly spiraled out of control due to the government’s failure to modernize digital infrastructure.

"Out-of-date IT slows the modernisation of many public services, interferes with efficient government and is increasing the risks of successful cyber-attacks," he says.

In 2020, Defra estimated that it would need to spend more than three-quarters of its digital budget maintaining aging systems, according to the NAO, while the Ministry of Defence relies in part on equipment dating back to the Cold War for defense inventory management.

As such, the NAO is set to recommend that the government prioritize replacing antiquated IT systems, improve cross-departmental data sharing, and place a stronger focus on recruiting and retaining staff with in-demand technology skills.

The speech has been welcomed by the TaxPayers' Alliance.

"Short-term thinking and poor systems management has blighted the public sector for far too long,” said research director Darwin Friend.

“Failure to implement productivity gains is inexcusably wasteful, as billions of pounds of taxpayers’ money and large swathes of state resources are squandered unnecessarily.

"If there is to be any hope of remedying poor public services and soaring expenditure, ministers must embrace productivity-boosting solutions across government."


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Davies said that procurement needs to be improved, with a third of contracts awarded by large government departments in 2021-22 not being subject to competition.

However, this may be easier said than done. Liberal Democrat digital spokesman Lord Clement-Jones recently queried the rising cost of the Home Office's three-year cloud deal with Amazon Web Services (AWS), which he said could hit as much as £451 million - more than three times the original projected cost.

The Home Office is being 'held to ransom', Lord Clement-Jones suggested, with cloud services deals concentrated amongst just two or three companies.

According to recent figures from public sector spending researcher Tussell, AWS recorded direct public sector revenue from the UK government of £253 million in 2022/23, up 76% on the previous year.

Emma Woollacott

Emma Woollacott is a freelance journalist writing for publications including the BBC, Private Eye, Forbes, Raconteur and specialist technology titles.