UK councils could spend £8 billion ($10.1 billion) on technology each year, but some believe suppliers don’t have the goods they need and adaptations can “cause significant costs”.
Or so the report says [PDF] from the Department for Progress, Housing and Communities, which highlights the barriers local authorities can face when buying technology to tackle specific problems. Even when they are willing to pay for the adjustments requested, deadlines are often long and councils are locked into systems that are not suitable.
It notes that councils “operate within a market that does not always provide what they need, where implementing even minor changes can incur significant costs and lengthy timelines and are locked into systems that are not fit for purpose. Added to these councils may not have the skills or knowledge for efficient procurement.”
Collectively, councils spend around £1-2bn ($1.26bn to $2.52bn) a year directly on IT, of which as much as £1bn ($1.26bn) is used to maintain outdated and legacy systems, the report.
The £8 billion ($10.1 billion) figure quoted also includes staff and procurement costs.
Within the document, original research based on roundtables and case studies details the challenges council IT staff typically face.
Councils mainly focused on a number of key services, some of which they are legally obliged to provide, which makes it difficult to prioritize ICT projects, says Assoc. And with heavily “siloed” departments, it’s hard to get a coherent digital transformation plan.
At the same time, different parts of the council may have different governance, which again challenges ICT project plans and funding. They can’t learn from the past either, because they don’t have quality data. Skills shortages are a perennial problem, the report added.
One council worker summed it up: “It is difficult to prioritize change projects without a clear set of priorities to align with. The objectives in the Council Plan are too vague. They can be used to justify any work. We have no room to define direction when we are forced to keep lights on, which requires stronger direction from the top.”
Based on earlier studies, the report estimates that the direct cost of IT project failures in local government could be between £19m and £31m per year ($24-38m).
“The value of other production activities that could have been achieved without these failures is likely to exceed these estimates,” the report said.
The stories mentioned in the paper will be familiar to the readers Register. Somewhat of the worst case scenario is Birmingham City Council’s implementation of Oracle for HR, Finance and Procurement.
The implementation budget grew from £20m to £131m (from $25m to $165m), as the council was unable to successfully tailor the software to suit its needs. The council now plans to re-deploy Oracle out of the box. In the meantime, it is paying £5.1 million ($6.44 million) for a third-party solution to fill the void. ®