Recommendation 6

Government is underestimating how difficult it will be to consolidate its buying power centrally when procuring digital technology across government, in a way that will give it maximum leverage. Spending over £14 billion annually on digital technology suppliers gives government considerable buying power and the potential to make deals that benefit the taxpayer. Historically, government has sought to exercise buying power through competition between technology suppliers. But the digital technology market is increasingly being dominated by a small number of very large suppliers, giving the government limited choice. GDS has a goal to support government to maximise its commercial leverage by moving beyond memoranda and frameworks to a position where different parts of government can commit to contracting with the same supplier. However, in practice it can be difficult to line up multiple customers with differing requirements. Government will therefore need to adopt wide–ranging changes to how it approaches digital commercial activity, which reflect the changing reality of technology markets. For example, it will need more clarity on how the centre of government and departments work together, and more focus on requirements developed in advance of contract awards. In dealing with cloud providers, it will need to more fully understand its negotiation levers and have the ability to commit money in order to have the best possible leverage. recommendation The Cabinet Office and DSIT should design a suitable commercial construct moving from the current conceptual level to a more detailed explanation of how things should work, recognising that this is a new cross–government approach with new processes. 7 1 Building a strategic approach at the centre of government Introduction