Summary

• The government says it cannot publish a central annual digital transformation spending figure using existing financial systems.
• The Commons Science and Technology Committee criticised gaps in oversight, leadership and accountability in the government response.
• Ministers promised work on legacy systems and vendor lock-in, but did not resolve the Palantir NHS contract break clause.

The UK government has told MPs that it cannot publish a consolidated annual account of digital transformation spending across departments and public bodies because existing financial systems do not support that reporting, prompting renewed criticism of how ministers oversee public technology investment.

The admission appears in the government’s response to a June report on digital government by the Commons Science and Technology Committee, published on 22 October. The committee says the response leaves important questions about the cost, leadership and governance of modernisation unanswered.

The findings belong to the Science and Technology Committee rather than the Public Accounts Committee. Its concern is not that every department lacks spending records, but that government cannot provide the cross-department annual total sought by MPs using its existing reporting arrangements.

In its response to the report, Rewiring the state: Delivering digital government, ministers said they would consider improving the presentation of digital and data-driven expenditure over time. The committee criticised the absence of a clearer timetable or spending baseline against which technology programmes could be compared.

Such a baseline matters because digital reform brings several kinds of expenditure into one policy ambition. Replacing legacy applications, migrating infrastructure, redesigning public services and recruiting technical specialists may be financed through separate departmental budgets or programme classifications.

Without a common reporting method, it becomes difficult to establish what government has invested overall, whether particular services have delivered expected benefits or where several departments are paying for overlapping capabilities. A consolidated figure would not prove value for money by itself, but could support more consistent scrutiny.

Spending figures require comparable definitions

An ordinary technology budget does not necessarily capture all transformation spending. A project may include procurement, training, process redesign, operational support and the gradual retirement of older systems, with costs spread across different accounting categories.

Producing a useful account would require departments to distinguish ongoing operation from investment in change and apply definitions consistently. Comparing two programmes without that distinction can be misleading because one may include substantial initial development while another records only recurring licence or hosting expenditure.

The committee’s statement links financial visibility with the government’s ambitions to improve productivity through digital public services. It has questioned whether ministers can evaluate investments rigorously when they cannot produce the annual spending total requested.

That is a criticism by a parliamentary scrutiny body, not a finding that every technology project is ineffective or that all claimed savings are false. Individual programmes may retain separate business cases and financial records even when the central reporting system cannot aggregate them as MPs requested.

Effective evaluation would need to connect spending with results such as reduced processing time, fewer service errors, lower maintenance burdens or improved resilience. A faster transaction does not necessarily translate into an equivalent reduction in cash expenditure if staff or supplier obligations remain unchanged.

Legacy systems receive a prospective taskforce

The government has accepted the need for stronger coordination in addressing obsolete public sector technology. It has promised an action plan by the end of 2026 for establishing a taskforce to support modernisation of legacy systems across government.

That is an undertaking to develop an action plan, not evidence that the taskforce already exists or has received enforceable powers. The committee originally wanted a body able to coordinate work across departmental boundaries and address barriers that individual organisations have struggled to resolve.

Legacy applications can remain embedded in services long after their technology becomes difficult to maintain. They may depend on ageing infrastructure, specialist knowledge or interfaces whose replacement requires extensive testing. The cost of migration must be weighed against security weaknesses and the risks of retaining unsupported components.

Ministers also agreed to develop a strategy for reducing supplier lock-in, referring to internal capability and more extensive use of open standards. Those commitments could make future technology changes easier, but their effectiveness will depend on contract terms, documented interfaces and practical routes for transferring data between suppliers.

Standards alone cannot remove every dependency. Departments may use nominally common interfaces while relying on bespoke integrations, specialised staff or proprietary configuration that makes switching slow and expensive.

The committee additionally complained that government declined to identify which public bodies had not adopted basic data hygiene practices. Publishing detailed weaknesses might create security concerns, but independent scrutiny still requires a way to assess whether remediation is happening.

NHS contract decision remains open

The response also leaves uncertainty over the NHS Federated Data Platform operated under a contract with Palantir. The committee had recommended use of a February 2027 break clause and the preparation of an alternative, reflecting concern about dependence on a small number of technology suppliers.

The government has neither committed to exercising the clause nor ruled it out. It provided further detail on engineer access to data and said relevant privacy notices had been updated, while the committee sought additional clarification from the health department.

These statements do not establish that an exit has been agreed or that the existing arrangement must continue beyond the decision point. Either course would carry operational implications, including the need to preserve data governance and continuity for NHS organisations using the platform.

Replacing a major shared system can be expensive and risky where applications already depend on it. Retaining a provider without credible alternatives can also increase future switching costs. Procurement scrutiny therefore needs evidence of both the immediate operating requirements and the available long-term choices.

Central leadership remains disputed

The committee also criticised the response for failing to engage clearly with its proposal for a Government Chief Digital Officer at permanent secretary level. Its chair, Dame Chi Onwurah, raised concerns about accountability following changes to departmental responsibilities.

A named central leader would not automatically solve fragmented spending or legacy systems, but cross-government work requires authority to establish common standards, request comparable information and intervene where services depend on one another.

The October response offers commitments on supplier dependence and legacy coordination without yet delivering a single annual spending total, a functioning modernisation taskforce or a resolved decision on the NHS contract clause. The next test will be whether those promises produce identifiable actions, cost evidence and accountable delivery arrangements.