UK government's cloud strategy: Pay more, get less, blame vendor lock-in?
- Reference: 1740746289
- News link: https://www.theregister.co.uk/2025/02/28/uk_government_cloud_strategy/
- Source link:
Speaking to the Public Accounts Committee (PAC), Andrew Forzani, chief commercial officer in the Cabinet Office, said that if the government wanted to use its spending power to strike better deals with the top cloud providers, individual departments needed to align their requirements.
In December 2023, the Home Office [1]awarded market leader AWS a £450 million contract for cloud services over three years . The deal replaced [2]an earlier £120 million deal awarded in December 2020.
[3]
PAC member Lloyd Hatton, a Labour MP, pointed out to a panel of civil servants from the government's procurement and technology functions that inflation in the price of the AWS/Home Office deal raises some serious questions. "Why did it jump so much? Was the Home Office getting good value for money? Does the Home Office actually know what it needs?" he asked.
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Forzani said the government needed to acknowledge that there are a small number of "very dominant suppliers" in the cloud market.
"There is limited choice. If you want to leverage government purchasing power for hosting, you need to get a number of departments aligned around requirements. That is very challenging to do."
[6]
In January, the government launched a Digital Commercial Centre of Excellence (DCCE) – [7]along with a set of AI tools called Humphrey – designed to spot opportunities to reform government tech buying and support growth.
Forzani told MPs it would be part of the DCCE's role to align departments' cloud requirements and get better deals.
"We absolutely have an ambition to do that more," he said, "and that's going to be one of the key parts of the new center of excellence agenda. One of the founding principles of public procurement is competition. So, departments go out with their requirements, and these contracts are competed in a very limited market space. So I think we accept that in some of these markets, we don't actually have the leverage as much as we think we might, because there is very limited choice."
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In April last year, [9]The Register revealed that the government had admitted its negotiating power over billions of pounds of cloud infrastructure spending had been inhibited by vendor lock-in.
A document from the Cabinet Office's Central Digital & Data Office – [10]which has since been rolled into the Government Digital Service in the Department for Science, Innovation & Technology – said the "UK government's current approach to cloud adoption and management across its departments faces several challenges," which together "risk concentration and vendor lock-in that inhibit UK government's negotiating power over the cloud vendors."
[11]Legacy systems running UK's collector are taxing – in more ways than one
[12]Spending watchdog blasts UK govt over sloth-like progress to shore up IT defenses
[13]Why does the UK keep getting beaten up by IT suppliers?
[14]UK tax collector's phone service 'deliberately' bad to push users online, say MPs
Speaking to the PAC, Cat Little, Permanent Secretary at the Cabinet Office and chief operating officer of the civil service, said: "Because we've all had experiences of failed or difficult technological procurement, it's very difficult to have a one-size-fits-all approach to this. But if we look at some of the things that go wrong in some of our big procurements with technology companies, it's where we have had weak, 'intelligent client functions' within government, we weren't clear about the specification and what we actually wanted.
"I won't talk specifically about the Home Office case, but I think what we need to do in the center is to make sure that when we look at those lessons learned, we are doing everything we can to share those lessons, to work with our professional functions, to make sure that they have thought it through before we go signing contracts, and that we've got processes to check and test how those lessons learned have been applied."
The PAC hearing was in response to a report from the National Audit Office (NAO), which said there was [15]limited technical evaluation of government contracts , while technical risks were downplayed. "Complexities which emerge after contracts are signed can be too fundamental to be dealt with through a change control process," it said.
The NAO also pointed to the lack of digital skills across the government in managing the £14 billion annual procurement of digital services.
Responding to the report at the time, PAC chairman Geoffrey Clifton-Brown said the government's woeful handling of major digital programs had led to delays and costs to the taxpayer.
"Government has managed digital suppliers poorly, and the center of government has not provided direction to help departments become intelligent clients," he said. ®
Get our [16]Tech Resources
[1] https://www.theregister.com/2023/12/01/uk_home_office_aws/
[2] https://www.contractsfinder.service.gov.uk/Notice/4cc74b55-d2b1-43f5-9345-403e32ecee80
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/paasiaas&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z8HruMygvuGLPPoY0qjr5wAAAgk&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/paasiaas&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z8HruMygvuGLPPoY0qjr5wAAAgk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/paasiaas&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z8HruMygvuGLPPoY0qjr5wAAAgk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/paasiaas&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z8HruMygvuGLPPoY0qjr5wAAAgk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://www.theregister.com/2025/01/21/ai_humphrey_uk_government/
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/paasiaas&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z8HruMygvuGLPPoY0qjr5wAAAgk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.theregister.com/2024/04/04/uk_cddo_admits_cloud_spending_lock_issues_exclusive/
[10] https://www.gov.uk/government/organisations/central-digital-and-data-office
[11] https://www.theregister.com/2025/02/10/legacy_costs_hmrc/
[12] https://www.theregister.com/2025/01/29/nao_blasts_uk_gov_cyber/
[13] https://www.theregister.com/2025/01/28/uk_govt_it_suppliers/
[14] https://www.theregister.com/2025/01/22/pms_say_hmrc_phone_services/
[15] https://www.theregister.com/2025/01/16/nao_uk_government_tech/
[16] https://whitepapers.theregister.com/
Re: Not just "digital" skills
It is also bizarre that government is allowed to accepts bids from foreign corporations. Not only this doesn't benefit our economy, but it makes government vulnerable to whims of political forces of countries the bidders come from.
Re: Not just "digital" skills
Well yes, but the UK government are slaves to the idea that the market must provide, and unfettered competition gives the greatest benefits. The UK still applies much the same rules as the EU on public procurement, but it's just strange that the same rules in France result in mostly French suppliers, in Germany results in mostly German suppliers. There's some exceptions, but it's a fair generalisation.
Meanwhile, our government (local or national) happily export jobs and money and claim it's "best value".
Re: Not just "digital" skills
Mostly because the people in government never run a business and have no clue about the economy, how it works. Local business when they make profit, they tend to spend or invest it locally. Foreign business tends to shift as much profit as possible offshore, to minimise tax and they are more likely to subcontract to other foreign corporations rather than local ones.
So maybe it will be "cheaper", but because those companies pay less tax and it ignores the fact that nothing will trickle down.
Wrong question
Why on earth is the government using *any* cloud provider? If you think about data sovereignty, it ought to be in-house. And any government project is way above the threshold at which cloud financials stop making sense.
"I think what we need to do in the center"
She's in the GB Civil Service. I'm sure she meant "centre".
Krasnov
Given that Krasnov can at any given moment give an executive order to stop US companies providing services to the UK, the continued awards for foreign corporations are bizarre.
Surely British government should be seeking to grow domestic businesses?
We are never going to have our own AWS and other corporations at forefront of technology if subsequent governments piss at British business.
Re: Krasnov
Didn't we have UKCloud who went bust after HMG dropped them in favour of AWS?
Not just "digital" skills
Whilst the civil service is lacking in digital skills for reasons we know well (and which the CS is still doing little to address) there's an equally pressing matter of lack of applied commercial skills. Basic stuff like having a detailed understanding of the business model of the suppliers - how, where and when do they make money? Do they have a track record of fleecing customers in general and the public sector in particular? Making sure that public procurement rules don't result in an unsuitable contractor being appointed, procurement officers having the power to stop rushed contract awards when requirements haven't been defined (especially when some minister is pressing for a contract to be awarded solely so they can announce "progress". The civil service also need to both hold officials to account for failures, and recognise and reward those who are competent.