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Press releases 2013 -

OFT launches call for information into supply of Government ICT services

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49/13    3 July 2013

The OFT has today launched a call for information into the supply of information and communication technology (ICT) goods and services to the public sector and is calling for suppliers and purchasers to get in touch about their experiences.

ICT plays a crucial role in the delivery of all public services, including schools, hospitals and the police. It is also an important part of the UK economy, with the top 20 software and IT services providers earning about £10.4bn a year in revenue from the public sector.

The OFT is keen to ensure that competition in this sector works well. Healthy competition in any market drives down costs, drives up efficiency and promotes innovation, while a lack of competition can hinder productivity and, in turn, economic growth. 

The OFT is particularly seeking information about: 

  • The structure of the sector, for example the number of suppliers and their market share.
  • Whether there are barriers to entry which make it difficult for smaller businesses to compete in this sector.
  • Whether public sector users face high barriers to switching suppliers, such as costs of transferring and restrictive licence agreements.
  • Whether some suppliers seek to limit the interoperability and use of competitor systems with their own.
  • Whether outsourcing of ICT service provision results in a high level of dependence on suppliers' expertise, undermining the ability of public bodies to drive value for money over time.

There have been many reviews of the procurement of ICT by the public sector yet few studies have examined whether aspects of the supply side of the market inhibit competition. The OFT's review aims to address this imbalance.

Clive Maxwell, OFT Chief Executive , said:

'This work demonstrates a continued focus by the OFT on markets related to public services. Information and communication technology is a crucial part of any modern economy and is key to improving productivity in public services as well as businesses. Given the vital role that this technology plays in the delivery of public services and the cost to the taxpayer, the OFT believes it is important to explore whether there are any restrictions on competition.

'We want to hear both from industry suppliers and public sector users about how competition in this market works, any problems that they have experienced, and how it could be made to work better.'

More information about the specific issues being considered by the OFT can be found at on the Call for information page. Anyone who wishes to contact the OFT can email ict.consultation@oft.gsi.gov.uk or write to the address below by 18 August 2013.

ICT Call for Information
8th Floor
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London
EC4Y 8JX

NOTES

  1. Calls for information are carried out under section 5 of the Enterprise Act 2002 (EA02) which allows the OFT to obtain information and conduct research. 
  2. The £10.4 billion revenue figure comes from UK Public sector SITS Landscape 2012-13 Tech Market View (January 2013) p.5.
  3. The OFT has previously looked at public sector procurement, see Assessing the impact of public sector procurement on competition (2004) and Choice and competition in public services a guide for policy makers (2010).
  4. In October 2011, the Cabinet Office launched a detailed plan for the implementation of the Government's ICT strategy. The National Audit Office reviewed progress of the plan in its report Implementing the Government ICT Strategy: six-month review of progress, and in Information and Communications Technology in Government Landscape Review.
  5. Read Clive Maxwell's recent speech on Competition in Public Services.



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