Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Accepted
Department justified increased PwC contract scope for system functionality and future flexibility.
Conclusion
We observed that the above arrangements appeared favourable to PwC and that it was not unheard of for government to appoint consultants to implement the advice they have given and for the scope of such implementation work, and therefore its costs, to increase subsequently. The Department pointed out that it had originally appointed PwC as the managed service provider after an open procurement which PwC had won after meeting the required criteria.19 It, not PwC, had then increased the scope of the work, as it wanted the system to have greater functionality as this was integral to its ability to manage the loan book in a professional way.20 It also said that it was not sure that it could have procured a bespoke, off–the–shelf loan management system for this loan book.21 The Department assured us that, while the intellectual property rights to the underlying software system were owned by Singlify, delivery of the loan management system had been set up in such a way that it could procure a different party to provide the system in future.22
Government Response Summary
The full Loan Management System (LMS) Version 2 (V2) functionality was implemented in March 2025 for under £300,000 and the original PwC contract has been extended to preserve business continuity.
Government Response
Accepted
HM Government
Accepted
2.1 The government agrees with the Committee’s recommendation. Recommendation implemented: March 2025 2.2 The full Loan Management System (LMS) Version 2 (V2) functionality, as scoped by the department, was implemented in March 2025 for under £300,000 and in line with the committed plan. 2.3 The original PwC contract, which expired in March 2025, has been extended for a further year, as permitted through the original tender, to preserve business continuity and ensure appropriate support remains in place for LMS V2 functionality. The strategic review of the loan book (referenced in 1.5) will inform the requirement for a Managed Service Provider. If the role is to be retained, the Managed Service Provider contract will be re-tendered in line with appropriate government procurement guidelines and with an expectation that no further variations of the current PwC contract will be required.