5 times government procurement cost taxpayers dear

By Harry Fone, grassroots campaign manager at the TaxPayers’ Alliance

The National Audit Office published its report on government procurement during the coronavirus pandemic on Wednesday. It highlights a number of issues around public sector procurement - of which the TPA has long called for serious reform. 

But just how much of taxpayers’ money has been wasted in recent years? Here are 5 examples of how poor procurement and planning has resulted in billions of pounds of public funds going down the drain.


1. Test and trace

The TPA has been very vocal in its criticism of the scandalous cost of this £12 billion digital tool. While the aims were noble, few taxpayers would see the programme as an unmitigated success.

There were ways to do it better, not least by avoiding involvement from the scandal-prone Public Health England. The process and numbers involved don’t stand up to basic scrutiny. Speaking to a computer programming friend, I asked what his firm would have charged the government. He explained that at its core, test and trace is nothing more than a very big spreadsheet (hence the laughable error when the system failed due to an overburdened excel) and estimated the cost at a comparatively microscopic £100,000. Even if this overran 100 times, the cost would still only be £10 million. The point is that poor processes here likely led to huge costs. 
Money wasted: at least £11.99 billion


2. Midland Metropolitan Hospital

Public sector procurement is so bad it seems we can’t even build a hospital on budget, let alone on time. The Midland Met was supposed to cost £350 million and open in Spring 2019. At the time of writing the final bill is projected to be £988 million and won’t be completed until the Summer of 2022.

The collapse of Carillion has a huge part to play in this, but questions were rightly asked about why the government continued to award the firm contracts despite its well known financial troubles. At the time we called for the contract to be re-tendered as soon as possible. This didn’t happen, the half constructed building wasn’t weathertight, damage occurred as a result, and the cost to the taxpayer soared.
Money wasted: £638 million

3. British Army recruitment

Capita is a professional services company that was awarded a £1.3 billion contract to boost recruitment of soldiers to the British Army. The government tried to save money by transferring recruitment from high street careers offices to a call centre staffed by civilian contractors. It’s fair to say that this battle plan didn’t work particularly well.

There were numerous reports that applicants gave up trying to join because the recruitment process was “slow and complicated”. Capita missed its recruitment target by more than 50 per cent in 2017-18. Worse still the Ministry of Defence thought it was a wise idea to spend taxpayers’ cash on branded mugs to boost signups. Perhaps most incredibly of all there are plans to expand the new system despite repeated criticism. Ministers must fall into line and get a grip on the situation.
Money wasted: £1.3 billion

4. Emergency services network (ESN)

This is another classic example of inept government procurement when it comes to IT systems. The original budget for the ESN was £6.2 billion and scheduled for completion in 2019. When up and running it will be one of the most advanced systems in the world.

But this ambition, like many of the other projects mentioned, is responsible for a delay until early 2024 and an estimated final cost of £9.3 billion. Wanting the best system for Brits is a noble aim, but it has to be backed up with sound analysis of the challenges ahead and finding companies that can get the job done.
Money wasted: £3.1 billion

5. NHS patient record system

This slightly older example perfectly illustrates just how little successive governments have learned when it comes to procurement and project success. Back in the early 2000s, the go-ahead was given to an NHS patient record system. From the start there were huge problems, caused mainly by frequent changes to the project specifications. Any IT consultant worth his or her salt will tell you that tinkering with specification once you’ve started is a recipe for disaster. After the best part of 10 years and £10 billion up in smoke the project was abandoned. An absolute farce if ever there was one.
Money wasted: £10 billion


Public procurement regularly accounts for billions of pounds of public spending. It is therefore crucial that value for taxpayers is at the heart of all public-sector purchasing decisions, no matter whether it's a multi-million-pound military vessel or refurbishing the parliamentary estate. The government must take steps to improve the procurement process, such as better post tender contract management and opening up to as many viable providers as possible. Taxpayers would save taxpayers billions in the process.

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