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16 October 2013 | Gurjit Degun
The Office of Fair Trading (OFT) has launched a study into the degree of competition between companies that supply IT goods and services to the public sector.
The OFT said IT accounts for a “significant proportion” of total public sector expenditure, with an estimated £13.8 billion spent in 2011-12.
The study follows a call from the OFT for public sector IT buyers and suppliers to get in touch about their experiences to ensure there is adequate competition in the sector.
Respondents raised concerns certain businesses appear to have a large share of contracts in some areas of the sector; that there are high barriers to entry and expansion (especially for smaller scale IT businesses); and that public sector organisations face difficulties and high costs in switching suppliers.
The investigation will examine two parts of the sector – 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.”