Disorganized ICT contracts burden UK public services
posted by Glen Stidolph in Outsourcing |
A recent research report by the European Services Strategy Unit (ESSU), the independent public services ‘think tank’ giving guidance designed to assist public service professionals and others stakeholders in the progressive modernisation of public services, has called for ‘root and branch’ change in outsourced public service ICT contracts.The damning report on ICT outsourcing shows that 105 outsourced public sector ICT contracts have significant cost overruns, delays and terminations.ESSU examined large outsourcing contracts, PPP’s, PFI’s and strategic service delivery partnerships in central government, the health service, local authorities, public bodies and agencies over the past 10 years.It found that cost overruns amounted to GBP9 BILLION for the 105 projects, with an average percentage cost overrun of 30.5%. It also revealed that 30% of the contracts were terminated and more than half (57%) had cost overruns.
The report suggests that clearly some of the problems encountered by ICT projects are a result of over ambition, a lack of design and development before procurement and pressures for efficiency savings overtaking the ability to deliver, with the technical complexity of ICT projects often being underestimated.
Key Findings include:
- 105 outsourced public sector ICT projects with significant cost overruns, delays and terminations.
- Total value of contracts is GBP29.5 Billion.
- Cost overruns totaled GBP9 BILLION.
- 57% of projects experienced cost overruns.
- The average percentage of cost overruns is 30.5%.
- 33% of contracts suffered major delays.
- 30% of contracts were terminated.
