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OFT investigates "competition problems" in public IT sector

Dominic Sacco
OFT investigates

UK consumer and competition authority The Office of Fair Trading (OFT) is probing the public IT sector to "ensure competition in the sector works well".

The OFT is reaching out to IT suppliers and buyers to learn more about how the industry currently works. It could affect how comptuing equipment is bought into Government-owned buildings and organisations, including schools.

"ICT plays a crucial role in the delivery of all public services, including schools, hospitals and the police. It is also an important part of the UK economy, with the top 20 software and IT services providers earning about £10.4bn a year in revenue from the public sector," read a statement.

"Healthy competition in any market drives down costs, drives up efficiency and promotes innovation, while a lack of competition can hinder productivity and, in turn, economic growth.

"There have been many reviews of the procurement of ICT by the public sector yet few studies have examined whether aspects of the supply side of the market inhibit competition. The OFT's review aims to address this imbalance."

The OFT is seeking information about the structure of the sector, the number of suppliers and their market share, if there are barriers to entry or switching suppliers, whether some suppliers seek to limit the use of competitor systems with their own, and whether outsourcing of ICT services undermines the ability of public bodies to drive value for money.

Clive Maxwell, OFT Chief Executive, said: "This work demonstrates a continued focus by the OFT on markets related to public services. Information and communication technology is a crucial part of any modern economy and is key to improving productivity in public services as well as businesses.

"Given the vital role that this technology plays in the delivery of public services and the cost to the taxpayer, the OFT believes it is important to explore whether there are any restrictions on competition.

"We want to hear both from industry suppliers and public sector users about how competition in this market works, any problems that they have experienced, and how it could be made to work better."

To contact the OFT email ict.consultation@oft.gsi.gov.uk or find out more information here

 

School computer image provided by Shutterstock

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Tags: Government, Business, pc, public, computing, competition, ict, it, tech, schools, sector, probe, investigation, computer, problems, buyers, suppliers, equipment, The Office of Fair Trading, Hospitals

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