The Office of Fair Trading is set to investigate the public sector IT market over concerns regarding the market share of some businesses in the sector. The study will ‘focus on the degree of competition’ in the sector.
The OFT has stated that “concerns were raised that certain businesses appear to have a large share of contracts in some areas of the sector, that there are high barriers to entry and expansion (especially for smaller scale ICT businesses) and that public sector organisations face difficulties and high costs in switching suppliers”.
The study hopes to understand the ways procurement practices interact with the market structure and suppliers’ behaviour. Two sectors which will be closely assessed are the commercial off-the-shelf software and outsourced IT.
Nisha Arora , OFT senior director of services, infrastructure and public markets, said: “Information and communications technology is vital for the efficient and cost effective delivery of today’s public services and for many aspects of public service reform. When competition works well, it can help drive down costs, encourage innovation and ultimately ensure that the taxpayer gets the best value for money. We want to look further into this market to understand whether it is really serving its customers’ interests.”
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