UK government hasn't the foggiest how much it's spending on digital transformation

The UK government says its finance systems cannot produce consistent annual figures showing how much departments and public bodies spend on digital transformation.

The Science and Technology Committee's June report warned that spending was fragmented and the government lacked a clear plan for a digital state. The UK public sector spends more than £26 billion annually on digital technology, but that broad estimate does not provide a comparable departmental breakdown.

Responding to the committee, the government agreed with the "intent to publish annual data on digital and data-driven spending" but said it did not "believe this is currently practicable." Existing finance systems could not "provide consistent, reliable and comparable data across departments."

"The government is open to this as a direction of travel and will work with HM Treasury to consider how this could be developed over time," the response said.

Committee chair Dame Chi Onwurah, who is due to address Parliament on Thirsday, said: "There's no shortage of hype about how technology can improve public services and reduce costs. Yet, frustratingly, the government cannot provide a clear picture of how much is being spent on digital transformation across departments and public bodies.

"At a time when ministers are asking taxpayers to fund significant investment in technology, it's concerning that they cannot show where the money is going or how value for money is being measured. This must be addressed as a matter of urgency."

The government abolished the Department for Science, Innovation and Technology in the summer, dividing its responsibilities between the Department for Digital, Culture, Media and Sport, the Cabinet Office, and the newly created Department for Business, Innovation, Science and Trade.

Onwurah said: "Additionally, the abolition of DSIT has only highlighted concerns about who is responsible for driving digital transformation across government. I call on the government to revisit its response and create clear leadership that can drive and deliver the scale of change needed."

The committee also called for the government to end Palantir's involvement in the NHS Federated Data Platform (FDP), citing concerns over sovereignty and vendor lock-in. The relationship has drawn criticism over £60 million in earlier contracts awarded without competition.

The government said it would review the FDP contract "in line with standard contract management processes to inform a decision on whether to exercise the optional two-year extension."

The response did not commit to an early exit. It said any termination would have to comply with the contract's terms and public procurement law. "If a decision is taken to not extend Palantir's contract, then the contract includes controls to support transition and continuity of services, ensuring that operational delivery and patient services are protected," the response said.

Onwurah said the committee was pleased the government had committed to developing a strategy to tackle vendor lock-in and build greater internal capacity. "Ministers should now go further by exercising the break clause in its FDP contract and take steps to reduce our dependence on a small number of large US tech firms," she added.

Palantir maintains that its technology provides value for money and helps the NHS improve efficiency. ®