Liam Maxwell - UK govt targets £500m IT savings this year and is 'taking business elsewhere'

Derek du Preez Profile picture for user ddpreez March 24, 2014
Government CTO Liam Maxwell was speaking at this week's Think Cloud for Government conference in London

Last time I spoke to the UK government's chief technology officer, Liam Maxwell, he described himself as a self-proclaimed 'competition nut' and ran through some of the Government Digital Service's key initiatives to transform public facing transactions into agile, digital products. You can read a write up of the interview here. Maxwell, who is not one to mince his words when it comes to government IT, took the stage at the Think Cloud for Government conference in London today and said that this competition-driving agenda will likely save taxpayers over £500 million this year. A tidy sum when added to the hundreds of millions of pounds saved over the previous two years. 

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Maxwell explained to delegates during his keynote that government departments are being forced to focus on 'Mission IT' – the important, front-facing digital stuff that directly impacts users – rather than the back-end platforms that have dominated time and budgets in the past. This is being achieved by the disaggregation of IT across central government, where departments will no longer procure and manage networks, hosting, desktops etc. all in one bundle, but instead will get access to a range of suppliers for each of these common infrastructures services from the centre. Breaking up common services into siloes and sharing them.

All of this is being wrapped round the use of open standards, which will allow buyers to switch easily between suppliers. Maxwell argued that this will increase the supplier base and drive down costs. He said:

“What the earth was going on and how did we get a decision made? Mission IT, which is the reason we all got involved, was being passed on to a bunch of specialist suppliers because everybody was too busy doing the bottom bit [back-end platforms] – frankly, too many people were fixing Blackberrys rather than getting on with the delivery of work. 

“This is our way of liberating people from the previous prison that they had, of trying to do everything. We are using open standards to get the commonality that we need to make things simpler, to enable us drive costs down and focus on the things that matter, Mission IT.”

We don't have a monopoly on wisdom

We have covered the topic of open data quite a bit here at diginomica, particularly the drive within the UK public sector – where the government has taken a lead on the international stage and has opened up thousands of datasets. That's not to say that there aren't problems. However, the openness isn't just for public data, it's also about open development, according to Maxwell. For example,, the new common website for all government departments, which has a standardised interface and relies on search functionality, is built using open source code.

This open source code has since been used by the New Zealand government to build a similar platform to, which is a great success story for the UK and GDS on the international stage. Maxwell explained that the UK has been working and sharing ideas with governments that are undertaking similar agendas - diversifying their supply base through increased competition, overhauling legacy systems with agile, digital products and using open source and open standards. He mentioned that the UK has been working closely with Israel, Estonia and South Korea (note the absence of the traditional partners, such as the US).

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“We don't feel like we have a monopoly on wisdom. We feel that if we open stuff and open source it we will have better long term results. We are working well with governments that are doing the same thing, we are thinking the same way as those governments.”

Maxwell also took time on the stage to boast about the ongoing success of the G-Cloud, which is an iterative framework that contains thousands of suppliers – most of them SMEs – all of which provide cloud services for the public sector. These services are catalogued online via the CloudStore and spend has now reached over £124 million, over half of which is with small and medium sized supplier, a key purpose of the framework.

He said that people shouldn't complain that the £124 million figure is relatively small, when compared to £10bn+ annual spend on IT, as each transaction is saving at least 50 percent on average  on what would have previously been spent.

“Every time somebody spends on the G-Cloud, our projection is that we save 50 percent of what we were buying. Every pound spent on G-Cloud is delivering the same services but saving us 50 percent of what we spent before. The larger that number becomes, the more savings. A lot of people come and say that's not very much, but that's new money. 

“We have examples of a service costing £50,000 from one supplier on the G-Cloud, and one of our traditional suppliers quoting £5m. That's not a rare occurrence.”

Business has gone elsewhere

One of the main priorities for the government is to increase the use of SMEs and move away from using a small number of large suppliers for most of its IT business (the oligopology), with a target of over 25 percent of spend going to smaller businesses by 2015. It is hoped that this could even reach 50 percent in the future.

However, things got a little bit tense during Maxwell's session when someone in the audience suggested that the government's

persistence to keep referring to the larger, traditional suppliers as an 'oligopoly' wasn't conducive to building digital services going forward, as many assume that large suppliers will always play a role  and as such it isn't wise to completely alienate them. The effects of this are already being seen, with some suppliers now lashing out at the government.

But given the string of costly IT cock-ups at the hands of big suppliers, as well as the amount of spend that has gone their way in recent years, Maxwell isn't ready to drop the term just yet and said that the changes are just the results of public sector business changing.

He said:

“Oligopoly is about the only collective noun that describes their behaviour. It's true. Why do you refer to a small group of large companies doing large amounts of locked in business with you as an oligopoly? That's what they are. 

“We judge everything we do on the data - an inability to move off and an inability to accept the change that people need, that's a way a lot of suppliers do still behave. When we are building new stuff we are doing it from a flexible framework, which enables them to work with us on the terms that we set as the customers and change things as the requirements change for our users. 

“We aren't having a big conflict with the suppliers, because that's not worth doing, we are just buying something different. A lot of people are getting upset because business has gone somewhere else, but that's because business has gone somewhere else. We will continue to refer to it as the oligopoly, because that's what it is.”

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