PAYE Umbrella techies specialising in IT contracting may, ironically, be the beneficiaries of a ‘get tough’ approach on Whitehall’s outsourced IT partners, which is blacklisting those considered to be too ‘high risk’ for fresh contracts.

Why should IT contractors working through PAYE Umbrella companies be encouraged by this? Chiefly because the contractors targeted have been corporate-sized giants whose prior dealings with the state have not come up to scratch.

The process is designed to realise Cabinet Officer minister Francis Maude’s vow to root out wasteful spending by central government departments. Fujitsu, already reeling from its 2008 ejection from the NHS’ electronic patients’ records contract, has the dubious honour of being one of the first names on the new blacklist, along with another company which has not been identified. The Financial Times, which broke the story, mentioned G4S, which presided over the security-staffing debacle at the Olympics and may now be feeling distinctly nervous.

According to Mr Maude, savings of £5.5 billion have been made in the last year alone, £1.75 billion of which came from a controversial moratorium on temps, IT consultants and contracts worth over £100 million. He insists that the government is determined ensure that contractors who have failed to deliver will no longer have bids accepted.

Mr Maude said: “If you have a two or three year [IT] procurement, then almost by definition what you’ve bought is obsolete by the time it’s actually in place. And if you then lock it in for a long contract period, it’s vintage by the time you get to the end of it.”

Smaller, shorter IT contracts favouring flexible workforces may well replace some of these behemoths.

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