uk public sector ict overview and forecast to 2016 17 - sp.pdf · figure 11: local government...

Reform within austerity

UK public sector ICT overview and forecast to 2016–17

August 2012

Reform within austerity: UK public sector ICT overview and forecast to 2016–17 www.kable.co.uk / © Progressive Digital Media Group PLC / +44 (0) 20 7936 6997

Contents

1 Executive summary .............................................................................................1 2 Introduction ..........................................................................................................4

2.1 Scope and structure ..................................................................................................... 4 2.2 Methodology................................................................................................................. 5

3 Overall context .....................................................................................................6 3.1 Political environment .................................................................................................... 6 3.2 Current structure of the public sector ............................................................................ 7 3.3 The government’s broad themes for public sector restructuring.................................... 9 3.4 Fiscal agenda ............................................................................................................... 9 3.5 Reform of public service delivery ................................................................................ 10

3.5.1 Open public services..................................................................................... 10 3.5.2 Reforming business and economic support and regulation ........................... 11 3.5.3 Reform of the welfare sector ......................................................................... 12

3.6 Transparency agenda................................................................................................. 12 3.7 The government ICT strategy ..................................................................................... 15 3.8 The Public Services Network (PSN) ........................................................................... 16

3.8.1 The PSN defined .......................................................................................... 16 3.8.2 PSN governance structures .......................................................................... 17 3.8.3 PSN commercial objectives .......................................................................... 17 3.8.4 Evolution of the PSN and its key frameworks................................................ 18

3.9 The G-Cloud/CloudStore ............................................................................................ 19 3.10 Procurement of ICT .................................................................................................... 20

4 ICT market forecast ...........................................................................................23 4.1 Expenditure by sector ................................................................................................. 23 4.2 Current spend by category ......................................................................................... 24 4.3 Country breakdown .................................................................................................... 26 4.4 Forecast for ICT expenditure to 2016–17 ................................................................... 27 4.5 Changes since previous forecast................................................................................ 29

5 Central and devolved government ...................................................................30 5.1 Market structure and funding flows ............................................................................. 30 5.2 Drivers and initiatives ................................................................................................. 30

5.2.1 Service integration across Whitehall – the rise of SIAMs .............................. 31 5.2.2 Outsourcing .................................................................................................. 32 5.2.3 Shared services and ISSCs .......................................................................... 32 5.2.4 Digital by default ........................................................................................... 33 5.2.5 New ICT procurement approaches ............................................................... 34

5.3 Forecast ..................................................................................................................... 36 5.3.1 Opportunity areas within the forecast ............................................................ 37

6 Local government ..............................................................................................39 6.1 Market structure ......................................................................................................... 39 6.2 Funding flows ............................................................................................................. 42 6.3 Drivers and initiatives ................................................................................................. 43

6.3.1 Achieving savings in corporate ICT ............................................................... 44 6.3.2 Technology supporting new ways of working ................................................ 44 6.3.3 Adoption of the PSN ..................................................................................... 44 6.3.4 ICT and the transformation of relationships with citizens............................... 45 6.3.5 Outsourcing .................................................................................................. 45



7 Health ..................................................................................................................48 7.1 Market structure ......................................................................................................... 48 7.2 Funding flows ............................................................................................................. 49 7.3 Drivers and initiatives ................................................................................................. 50

7.3.1 NHS Commissioning Board .......................................................................... 51 7.3.2 Health and wellbeing boards ......................................................................... 51 7.3.3 National ICT strategy .................................................................................... 52 7.3.4 Post the NPfIT .............................................................................................. 53


8 Education............................................................................................................56 8.1 Market structure ......................................................................................................... 56 8.2 Funding flows ............................................................................................................. 57 8.3 Drivers and initiatives ................................................................................................. 59

8.3.1 Reform of education...................................................................................... 59 8.3.2 Market fragmentation .................................................................................... 60 8.3.3 Drivers within the university sector ................................................................ 61


9 Justice.................................................................................................................64 9.1 Market structure and funding flow............................................................................... 64

9.1.1 England and Wales....................................................................................... 64 9.1.2 Scotland........................................................................................................ 66 9.1.3 Northern Ireland ............................................................................................ 67

9.2 Drivers and initiatives ................................................................................................. 68 9.2.1 ICT initiatives ................................................................................................ 69


10 Policing ...............................................................................................................74 10.1 Market structure and funding flows ............................................................................. 74

10.1.1 England and Wales....................................................................................... 74 10.1.2 Scotland........................................................................................................ 75 10.1.3 Northern Ireland ............................................................................................ 76 10.1.4 UK-wide forces ............................................................................................. 77 10.1.5 National Crime Agency (NCA) ...................................................................... 77 10.1.6 National Policing Improvement Agency (NPIA) ............................................. 78

10.2 Drivers and initiatives ................................................................................................. 79 10.2.1 ISIS............................................................................................................... 79 10.2.2 Mobile technology ......................................................................................... 80 10.2.3 Penalty notice processing – PentiP ............................................................... 80 10.2.4 New police ICT company .............................................................................. 80



11 Transport ............................................................................................................83 11.1 Market structure and funding flows ............................................................................. 83

11.1.1 Central transport ........................................................................................... 84 11.1.2 Devolved transport........................................................................................ 85 11.1.3 Local and regional transport.......................................................................... 85 11.1.4 Devolved transport........................................................................................ 86 11.1.5 Roads infrastructure...................................................................................... 86 11.1.6 Buses ........................................................................................................... 87 11.1.7 Rail and tram networks ................................................................................. 87 11.1.8 Aviation ......................................................................................................... 88

11.2 Drivers and initiatives ................................................................................................. 88 11.2.1 DfT measures ............................................................................................... 89 11.2.2 Transport for London’s Project Horizon......................................................... 89 11.2.3 MCA hub-and-spoke strategy ....................................................................... 90 11.2.4 DVLA online expansion................................................................................. 90 11.2.5 Smart ticketing and real time information schemes ....................................... 90


12 National security and defence ..........................................................................93 12.1 National Security Council............................................................................................ 93 12.2 Awareness and intelligence-gathering agencies ......................................................... 94

12.2.1 Planning and co-ordination structures ........................................................... 95 12.3 Threat prevention and protection ................................................................................ 97 12.4 Civil contingency – crisis response and recovery........................................................ 98 12.5 Defence.................................................................................................................... 100

12.5.1 Land Forces................................................................................................ 101 12.5.2 Air Command.............................................................................................. 101 12.5.3 Navy Command .......................................................................................... 101 12.5.4 Permanent Joint Headquarters ................................................................... 101 12.5.5 Central TLB ................................................................................................ 102 12.5.6 Defence Estates ......................................................................................... 102 12.5.7 Defence Equipment and Support (DES)...................................................... 102

12.6 Drivers and initiatives ............................................................................................... 104 12.6.1 CONTEST – the counter-terrorism strategy ................................................ 105 12.6.2 Strategic Defence and Security Review (SDSR) ......................................... 105 12.6.3 Defence Future Force 2020 ........................................................................ 106 12.6.4 The Defence Core Networks Services (DCNS) programme ........................ 107 12.6.5 Reform of MoD procurement....................................................................... 108

12.7 Forecast ................................................................................................................... 109 12.7.1 Opportunity areas within the forecast .......................................................... 110

13 Supplier landscape ..........................................................................................112 13.1 Market leaders.......................................................................................................... 112

13.1.1 Winners and losers ..................................................................................... 113 13.1.2 Mergers and acquisitions ............................................................................ 114

14 Implications for Suppliers ...............................................................................115 14.1 Sector priorities ........................................................................................................ 115 14.2 The austerity menu................................................................................................... 116 14.3 The efficiency agenda .............................................................................................. 117 14.4 The reshaping agenda.............................................................................................. 118 14.5 Emerging opportunity areas...................................................................................... 118


List of figures

Figure 1: Public sector organisations

Figure 2: Split of ICT spend by public sector

Figure 3: Expenditure by ICT category

Figure 4: ICT expenditure by country and sector, 2011–12

Figure 5: ICT spend by sector to 2016–17

Figure 6: Public sector ICT expenditure, 2011–12 to 2016–17

Figure 7: Departmental budgets for 2011–12

Figure 8: Central government ICT forecast to 2016–17

Figure 9: Scope of local government services

Figure 10: Local government income sources

Figure 11: Local government expenditure on services

Figure 12: Local government ICT forecast to 2016–17

Figure 13: Healthcare structures across the UK

Figure 14: Health ICT forecast to 2016–17

Figure 15: Number of schools by type and region

Figure 16: Education ICT forecast to 2016–17

Figure 17: Key organisations and delivery channels within the MoJ

Figure 18: Scottish Justice Directorate structure and funding flow

Figure 19: Structure and funding flow of the Northern Ireland Department of Justice

Figure 20: Short- and medium-term opportunities from ICT initiatives across criminal justice

Figure 21: Justice ICT forecast to 2016–17

Figure 22: Police ICT forecast to 2016–17

Figure 23: Transport expenditure

Figure 24: Transport ICT forecast to 2016–17

Figure 25: Future towers approach for MoD ICT

Figure 26: Defence ICT forecast to 2016–17

Figure 27: Top 22 ICT suppliers to the public sector in 2010–11

Figure 28: Summary of spending and reform drivers across sectors

Figure 29: The austerity menu of cost-reduction options


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1 Executive summary

Two years into its programme of government the coalition continues to wrestle with economic challenges and is already

experiencing its fair share of “events”. ………………………………………………………………………………………

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The intended reforms of the NHS within the Health and Social Care Bill continue to be opposed by a majority of

clinicians and their professional bodies, ……………………………………………………………………………………… ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….

These challenges and pressures have influenced ICT expenditure across the public sector. In 2011–12 Kable

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2 Introduction

This report summarises the status of the UK public sector ICT market in 2011–12, and anticipates developments

over a five year period to 2016–17. This overview of the market for

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Those who are already working with public sector

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2.1 Scope and structure

Kable covers the use of ICT in the public sector across England, Scotland, Wales and Northern Ireland. We

forecast ICT


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2.2 Methodology

Kable has been providing market intelligence and research reports on ICT in the UK public sector since 1990. Senior

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3 Overall context

This section provides an introduction to and broad overview of the current public sector………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

3.1 Political environment

The term United Kingdom (UK) refers to Great Britain and Northern Ireland, and covers England, Scotland, Wales

and Northern Ireland, but excludes the Channel Islands and the Isle of Man. Generally, UK citizens see themselves

there are moves to provide further autonomy of decision making to these devolved assemblies.


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3.2 Current structure of the public sector

The public sector is already a vast landscape of multi-faceted organisations, and each sector has its own buying

frameworks and procurement arrangements alongside the few national frameworks.

Figure 1: Public sector organisations

Source: Kable

3.3 The government’s broad themes for public sector restructuring

The coalition views this as being both about reducing the overall size of the public sector and an opportunity to

undertake reforms aimed at improving the way in which services are procured and ultimately delivered.

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Hierarchical and bureaucratic structures need to be transformed from vertical silos into horizontally integrated systems,

which then facilitate customer orientation and increase levels of transparency and

accountability………………………………………………………………………………………………………………………………

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This is unlikely to be a painless journey. Moving from a structurally disintegrated public sector towards one that is

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3.4 Fiscal agenda

The coalition remains committed to its spending plans as laid out in the Comprehensive Spending Review 2010

(CSR2010),

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The hardest hit departments under CSR2010 were the Foreign Office, whose budget shrank by …………………………………………………………………………………………………………………………………………..…………………………………………………………………………………………………………………………………………..…………………………………………………………………………………………………………………………………………..…………………………………………………………………………………………………………………………………………..


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4 ICT market forecast

4.1 Expenditure by sector

Within an overall total of XXXX in 2011–12, the split of ICT spend by sector is as follows:

Figure 2: Split of ICT spend by public sector

Source: Kable


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5 Central and devolved government

5.1 Market structure and funding flows

Departments or ministries of state are responsible for development of policy

and ensuring implementation.

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re responsible for

the

Figure 7: Departmental budgets for 2011–12

Source: Kable; Data: HM Treasury Public Expenditure Statistical Analysis 2011–12

uk public sector ict overview and forecast to 2016 17 - sp.pdf · figure 11: local government...

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