IT contractors working on projects for government departments through SME (small and medium enterprise) agencies have had their contracts cancelled on the orders of the Cabinet Office.
This news, revealed by Computer Weekly, represents a U-turn on the Cabinet Office’s own ICT strategy to do more business with SMEs. And not only is it a kick in the teeth for contractors and SMEs, but it is also likely to lead to higher bills for taxpayers.
According to Mark Ballard, writing for Computer Weekly, the Cabinet Office’s Efficiency and Reform Group (ERG) instructed departments such as the Ministry of Justice to hand over all interim staff business to Capita’s £123m Cipher contract.
And, writes Ballard, the Ministry of Justice’s handover occurred just a “day after the Cabinet office published an ICT strategy that promised to end the UK ‘ICT oligopoly’, of which Capita is one of the largest members, and to do more business direct with SMEs.”
Capita’s Cipher contract and the Contractor and Interim Exchange (CIX), which is run by public sector procurement organisation Buying Solutions, are the only channels alongside local frameworks that the Cabinet Office now allows government departments to use for recruiting contractors.
Martin Tucker, managing partner of interim recruiter Gatenby Sanserson, told Computer Weekly: “The majority of government departments have signed up to Cipher and that means Capita manage the hiring of interims. Government departments have decided to go with a big contract with a PLC, rather than engage with small SMEs like us.”
An unnamed source told Computer Weekly that IT was particularly hard-hit by the policy of not allowing government departments to recruit IT contractors direct or through small recruiters, and that by reducing competition to just a few major suppliers, service would suffer.
And, despite the Cabinet Office apparently ordering the transfer of interim contracts to Capita on the grounds of cost savings, the source points out that a reduction in competition can only lead to one thing: a rise in prices that taxpayers will have to pay for.
Bizarrely, the Cabinet Office ICT strategy favouring SMEs is still published policy. This suggests two equally unfortunate scenarios: a distinct lack of joined-up thinking within government or an outright U-turn on its pledge to spend more public money with SMEs, and reverting to being a government for big business.