Source · Select Committees · Public Accounts Committee
Recommendation 33
33
Accepted
Government's fragmented cloud buying approach limits potential commercial leverage and benefits
Recommendation
Government has made attempts to co–ordinate in order to gain benefits from its scale. GCF has signed agreements with the major cloud providers which allow them to treat the public sector as a single customer for the purposes of determining volume discounts.56 However, DSIT recognised that government’s current approach to buying cloud was fragmented and “is not right”. It told us that “there is real work to do on that specific point.” We therefore asked how government could become a modern and sophisticated buyer of cloud. DSIT told us that “the way cloud economics works is that being able to write a commitment to a cloud provider matters 54 Qq 2, 23, 29; C&AG’s Report, para 12 55 Qq 27–29 56 C&AG’s Report, para 12 20 an awful lot to them, and it gives us maximum commercial leverage.” 57 GCF said that “ultimately, to get the best leverage, you would do a single deal” but that “in practice, it is very difficult to line up multiple customers with differing requirements”. It explained that improving its approach will entail moving beyond memoranda and frameworks to a position where commercial arrangements support government being able to commit the money and contract singly with the same supplier.58
Government Response Summary
The government agrees and will, by December 2025, evolve the Commercial Operating Model, develop a standard taxonomy for category strategies to consolidate demand, and review controls and assurance frameworks to optimize its approach to becoming a more sophisticated buyer of cloud services.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2025 6.2 The Commercial Operating model is evolving to consider how to facilitate the delivery of the functional standards for commercial and digital and will be adjusted to reflect any proposed changes to the Commercial operating model under the Cabinet Office departmental transformation programme. 6.3 The review will also include the development of a standard taxonomy from which we can develop category strategies to ensure that we standardise specifications, consolidate demand, and shape our approach to the market, calling on resources and insights from across HMG and the wider public sector where appropriate. 6.4 A review of the controls and assurance frameworks will be undertaken to ensure that a unified, proportionate and considered approach is taken to optimise the process and accelerate delivery.