Over the past five years, England has witnessed a significant increase in public spending on information technology, soaring to £17.3 billion ($21 billion), according to recent research. Tussell, a procurement research organization, discovered that the share of public spending allocated to IT has surged from 5 percent to 10 percent during the same period.
In its commentary, Tussell suggested that the present moment presents a unique opportunity for IT companies to concentrate on the public sector. However, it’s crucial to note that despite this growth, IT spending lags far behind the construction sector, which commands 21 percent of government spending in England. Additionally, 42 percent of expenditures are directed towards “other” sectors in the latest data for 2022.
The overall government spending in England reached £173 billion ($210 billion), marking a 4 percent decrease from the previous year. Notably, during the fiscal year 2020/21, amidst the pandemic’s peak, public spending surged by 28 percent to £181 billion ($219 billion). Even compared to 2016, last year’s spending was substantially higher when the UK’s public spending stood at £116 billion ($140 billion).
This not only signifies the growth in IT’s share of the budget but also reflects an overall expansion of the financial pie. Consequently, the total IT spending amounted to approximately £17.3 billion last year, nearly three times the £5.8 billion ($7 billion) recorded in 2017/18.
Tussell’s data collection focuses on procurement and expenditure from contracting authorities in England, excluding other UK nations due to differing legal transparency requirements.
The surge in tech spending during the pandemic can be attributed, in part, to emergency measures taken to address COVID-19. For instance, the UK invested £37 billion ($45 billion) in a contact tracing system and its associated IT platform, albeit falling short of preventing a second lockdown.
Among the major tech projects, a substantial £9.3 billion ($11.3 billion) was allocated to the delayed upgrade of the voice and data network supporting emergency services—the Emergency Service Network.
Legacy systems, however, pose a financial burden, with an independent study by the Modernization and Reform Group revealing that the UK government dedicates $2.3 billion ($2.84 billion) of its annual £4.7 billion ($5.81 billion) tech budget to maintaining “keeping the lights on activities” on outdated systems.
Yvonne Gallagher, digital director of the National Audit Office, highlighted challenges arising from a lack of digital knowledge among senior management. Large-scale programs often lack sufficient thinking, analysis, architecture, and design, leading to oversights.
The premature creation of contracts based on vague business cases without a clear understanding of requirements is a prevalent issue, according to Gallagher. This results in emerging complexities during program implementation, causing challenges for all parties involved.
The National Audit Office’s report last year criticized the overbudget and overdue Emergency Services Network, revealing a cost increase from £6.2 billion in 2015 to £9.3 billion in 2019, with a seven-year delay.
Joanna Davinson, overseeing the Emergency Services Network for the past three years, transitioned to the role of executive director at the UK government’s Central Digital and Data Office (CDDO) last year, signaling a change in leadership.
Gallagher raised concerns about insufficient digital understanding among senior civil servants, emphasizing that decisions about major digital programs are often made by non-digital generalists with unrealistic ambitions for untested technologies.
Issues stemming from a lack of digital knowledge extend to managing and migrating from legacy systems, where experienced Chief Information Officers (CIOs) sometimes face challenges being heard by non-digital leaders.
The ambition for world-class services using integrated systems and data dates back to the mid-1990s, with various policies and initiatives culminating in the national data strategy in the late 2020s. Despite these strategies covering similar ground, the slow pace of genuine transformation indicates the challenges in achieving radical digital change.
Megan Lee, Director of Strategy Performance and Operations at CDDO, outlined initiatives to elevate the digital and data agenda, including the establishment of a permanent secretary level digital and data board. This board aims to enhance the visibility of digital priorities across government and strengthen connections with communities involved in transformation and operations.
Lee, having joined CDDO from management consultancy McKinsey, emphasized their commitment to supporting cross-departmental approaches for tackling core digital, data, and technology priorities. Last summer, an independent report by the Digital Economy Council highlighted concerns about the uncertain quality of technical product delivery in central government, warning of project failures due to insufficient support for best practices.
