Most public bodies license their software rather than own it. Contracts often run for many years, and replacing a system that is in daily use is expensive, so organisations frequently renew even when they are unhappy with the supplier.
Why changing supplier is difficult
Systems are often bought on contracts lasting many years. Over that time, the staff who understood the original decision leave, more of the organisation’s processes come to depend on the system, and data is stored in formats that only the supplier’s software reads easily. Moving to a different system then becomes expensive and risky.
The National Audit Office found that legacy systems are “often supported by the large suppliers who originally provided them”, and that many have become “black box” systems over time, which makes them unattractive for anyone else to take over and run.
The Police National Computer went live in 1974 and has been supported by the same large supplier for many years. When the Home Office came to renew that support, it tested the market. No other supplier came forward, and the existing supplier was awarded a new contract worth £48 million in 2022.
What it can cost a single council to exit a supplier contract in the revenues and benefits market, according to the Local Government Association. The Association reports that long contracts, high exit costs and a lack of alternatives keep councils with suppliers they are dissatisfied with.
Local Government Association, State of Digital Local Government [3]
A cost at this level usually makes renewal the cheaper option in the short term, even when a council is unhappy with the system.
Costs outside the budget
Licence fees appear in budgets, but the time that residents and staff spend working around poorly designed systems is not usually measured.
How long the average UK adult spends dealing with government bureaucracy every year, on the Government Digital Service’s own assessment.
State of digital government review, January 2025 [2]
Some of this time is unavoidable. A large part is spent re-entering information the organisation already holds, chasing reference numbers, or waiting on the phone where a service offers no other way in. Forty-seven percent of central government services and forty-five percent of NHS services still have no digital pathway at all.
Staff lose time in similar ways. Where a system does not meet their needs, staff often keep separate spreadsheets, and these are frequently maintained by one person, so the knowledge is lost when that person leaves.
The Government Digital Service estimates the unrealised saving from digitising public services at over £45 billion a year, between four and seven percent of public sector spend.
What changes when you own the software
A public body that owns its software outright has no licence renewal to negotiate. It can change the system when policy changes, employ someone to maintain it or pay us or another supplier to do so, and access its own data directly.
An owned system costs what it takes to build and to run. There is no annual licence increase set by a supplier.
We charge the cost of the work plus a 25 percent operating margin, at a published day rate. We arrange hosting for what we build, and this is priced separately. The software, the record of every change made to it and the documentation belong to you, with no licence attached.
See the model for how this is priced and the calculator for what a given commitment buys.
Owning software has its own costs, and not every system should be built this way. Where an off-the-shelf product is the better option, we will say so. For many well-defined problems, however, building and owning the software can cost less over time than licensing it.