Published on 17 November 2015
- Our Work
- The Reformer Blog
23 November 2015
G-Cloud 7 goes live today. The platform was introduced in 2012 and provides a means for the Government to procure cloud-based products from a list of advertisements. Each G-Cloud framework lasts 12 months, but a new variant goes live every six months—leaving two to overlap.
G-Cloud 7 lists nearly 22,000 services. Compared to other procurement frameworks, which might have a handful of bidders, this provides the Government with unrivalled information from which it can make an informed purchase. Consequently, it is estimated that G-Cloud saves the Government an average of 50 per cent on the goods and services it procures.
As well as increased transparency, the framework offers other significant wins. It accelerates the procurement process by providing a simple registration process, followed by a purchase agreement only if government enters into a transaction. G-Cloud 7 submissions closed on 6 October, and government may start purchasing today. This is much faster than the current procurement average of 120 days.
These improvements lower barriers to market entry, particularly for smaller firms who cannot afford the costs associated with lengthy procurement processes. The Conservative manifesto aimed for one third of procurement spend to go to SMEs, citing their innovation and ability to offer savings. SMEs currently account for half of all purchases made through G-Cloud.
Despite this, a comparatively small amount of procurement spend currently goes through G-Cloud. Until August, it had facilitated £753 million of spend since its introduction in 2012. In 2014-15 this accounted for less than 0.2 per cent of total procurement spend.
This number remains so low because of G-Cloud’s focus on IT products alongside a lack of motivation, or understanding of how, to use it. In 2013, it was found that 64 per cent of procurement professionals did not know how to use CloudStore (now Digital Marketplace—an umbrella framework within which G-Cloud functions). Widespread lack of understanding goes some way to explain why departments, such as the Home Office, who helped design the software spend a disproportionate amount on it.
The same lack of engagement is evident in local government, where 40 per cent of councils who responded to a recent survey had not been encouraged by central government to use G-Cloud; 2 per cent had never heard of it. This helps explain why only £44.3 million—or 5 per cent—of G-Cloud spend has gone through local government, as the graph depicts.
Local government has been accused of “wasting millions” by not using the G-Cloud for IT procurement. With significant savings required across government, it is imperative that G-Cloud is used effectively. The Government has pushed the agenda by installing a ‘Cloud First’ policy for IT purchases and emphasising the need to harness the benefits of digitisation. The savings are there for the taking, and, by using the G-Cloud, procurement can lead the way in achieving more for less.
Alexander Hitchcock, Researcher, Reform