OFT to probe public sector IT contracts

THE Office of Fair Trading (OFT) has launched an investigation into the supply of IT services to the public sector.

Its market study will focus on the degree of competition between companies which supplied some £13.8bn of such contracts in 2011-12.

Preliminary studies by the OFT, known as a call for information, have raised concerns that some businesses have a large share of contracts in particular areas, and that there are high barriers to entry and expansion for smaller firms.

Its investigation will also look into procurement practices and plans to examine two areas which make up around half of all expenditure – commercial off-the-shelf software and outsourced IT.

Nisha Arora, OFT senior director of services for infrastructure and public markets, said: “Information and communications technology is vital for the efficient and cost effective delivery of today’s public services and for many aspects of public service reform.

“When competition works well, it can help drive down costs, encourage innovation and ultimately ensure that the taxpayer gets the best value for money. We want to look further into this market to understand whether it is really serving its customers’ interests.”