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Government to put 50% of all new IT spend through SMEs

Computer Weekly -  The government wants to put half of all new IT spending through small IT suppliers – doubling the previous target that was designed to break the oligopoly of major system integrators that dominate Whitehall IT.

The ambitious new objective was revealed in the Cabinet Office’s latest report on progress to put 25% of government spending through small and medium-sized enterprises (SMEs) across all areas of purchasing, by 2015.

The new figure for IT was hidden away on page 16 of the 35-page report, and said: “Our ambition is that at least 50% of spend on new government IT flows to SMEs directly and in the supply chain. In exceptional cases where large IT contracts are required, we will expect at least 25% of the supply chain of those contracts to go to SMEs.”

Until recently, 80% of central government IT work was undertaken by just 18 large suppliers, according to the National Audit Office.

But through initiatives such as the G-Cloud framework, SME suppliers are starting to win more business as the new IT leadership regime in the Cabinet Office enforces limits on the size of Whitehall IT contracts. Over 60% of the £31m sales through G-Cloud have gone to SMEs so far.