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Health secretary Matt Hancock reveals why he thinks so many government IT projects fail

The health secretary, Matt Hancock, has revealed why he thinks so many major government IT projects fail to deliver on their stated aims.

Speaking at the GovTech Summit in Paris on Monday (12 November), the former digital secretary warned that public sector buyers were too eager to outsource entire digital transformation projects to system integrators.

“In the past, due to a lack of confidence, governments have gone to large system integrators so that a very small team can spend a huge amount of money asking somebody else to project manage it,” he told the audience of politicians, civil servants and entrepreneurs. “As a result they tend be not close enough to the business decisions and it goes wrong.”

Government departments, Hancock added, should develop their inhouse capabilities and break up contracts into smaller deals for startups. “It’s not a difference of the ambition of the scale of the roll out,” he said. “It’s simply that you don’t throw it over the wall to a systems integrator.”

But the health secretary, who recently unveiled his plans to transform the NHS into the world’s most advanced healthcare provider, admitted that while the procurement approach had been recognised in government for a decade, it was still “incredibly hard to deliver in practice”.

Hancock’s comments came as NS Tech published the results of a landmark analysis of thousands of public sector tech contracts from the last three years. The research, which was carried out by Tussell, revealed the value of awards won by the 10 biggest suppliers fell from 60 per cent of the total to 36 per cent. During the same period, the proportion of the value of awards won by small and medium-sized enterprises (SMEs) rose from nine to 16 per cent.

However, the government still has a long way to go if it is to meet its target of spending £1 in every three with SMEs by the 2022. Tussell found that the proportion of deals flagged as unsuitable for SMEs rose from 31 to 37 per cent over the three year window.

Speaking at the GovTech Summit on Monday, Oliver Dowden, the Cabinet Office minister, added that too often government buyers look at existing contracts and re-let them at a lower rate, rather than considering whether new technology could change the way the issue is tackled.

“I’m pleased to see SMEs gaining more market share,” he told NS Tech ahead of the conference. “Encouraging them to bid for government contracts is a big priority for me.”

The global govtech market is predicted to be worth £1tn by 2025.