Economies of scale will drive public sector IT procurement through G-Cloud, says expert

Out-Law News | 20 Feb 2013 | 3:42 pm | 2 min. read

Public sector bodies will be increasingly encouraged to make use of the 'G-Cloud' procurement framework because of the "economies of scale" it can provide, an expert has said.

IT and technology law specialist David Isaac of Pinsent Masons, the law firm behind Out-Law.com, said that the "compulsory mandating" of Government departments to use G-Cloud would be likely to be extended to all public sector bodies.

Isaac was commenting as the Cabinet Office marked the first year that the G-Cloud has been in operation by claiming the framework had been a "model of an innovative, more cost-effective and open way for the Government to buy and operate IT".

The G-Cloud system allows public sector bodies to gain access to services being offered by the listed suppliers during a set period. To date the Government has operated two G-Cloud supplier frameworks and it is currently consulting on a third offering.

"Government departments are now mandated to use the G-Cloud framework where they possibly can," Isaac said. "Traditionally departments have sourced their own IT services, but the Cabinet Office is keen to ensure that tax payers' money is spent more efficiently to deliver IT outcomes across Government. Departments are now required to use existing Government frameworks and standardised approaches to procuring services whenever possible. This is especially the case where IT solutions are capable of being commoditised across a number of departments."

"Using G-Cloud more will help deliver economies of scale and makes financial sense during times of austerity. I anticipate an increased effort to encourage other public sector bodies to make use of G-Cloud as a way to consolidate common public sector approaches to IT procurement," he added.

The Cabinet Office said that the two G-Cloud frameworks that have been in operation so far have attracted "more than 200 purchases of IT services" worth in excess of £6 million to suppliers. It said £4.6m of this figure had been spent on services offered by SMEs.

"In just 12 months, G-Cloud has shown itself to be a model for efficient public sector IT procurement, establishing a dynamic marketplace for cloud-based IT services," Cabinet Officer Minister Francis Maude said in a statement. "We have simplified the procurement process through G-Cloud to make it more accessible to a wider range of companies, leading to more choice, better value for the taxpayer and growth for the economy. Suppliers are asked what they can offer government, rather than being issued with complicated specifications that stifle innovation."

"This is the way we want government IT to be – simpler, quicker, cheaper and focused on matching solutions to business requirements, reducing waste and cutting costs," he added.

Denise McDonagh, the G-Cloud programme director, said that G-Cloud was a "game changer".

"I am convinced that G-Cloud is a game changer for the way government buys, manages, delivers and operates IT, and interacts with suppliers, driving improved productivity,  greater efficiencies and better value services for the taxpayer," McDonagh said. "The move to purchasing IT services as a commodity requires a culture shift for the public sector that won’t happen overnight. After only a year, though, most big government departments have bought services from the cloud, and there is significant buy-in from local government. Evidence of the benefits of cloud is growing all the time, and we are working with buyers to help them adapt to commodity-based IT purchasing."