The Office of Fair Trading has launched an inquiry into the supply of IT goods and services to the public sector.

The market study will look at competition in the sector, which accounts for around £14 billion in public spending.

The move follows an OFT call for information which highlighted concerns about the domination of some companies in certain parts of the public sector, the high cost of entry to the market, which affects SMEs trying to bid directly for public sector work, and problems public sector organisations face in switching suppliers.

Nisha Arora, OFT Senior Director of Services, Infrastructure and Public Markets, said:

“Information and communications technology is vital for the efficient and cost effective delivery of today's public services and for many aspects of public service reform.

“When competition works well, it can help drive down costs, encourage innovation and ultimately ensure that the taxpayer gets the best value for money. We want to look further into this market to understand whether it is really serving its customers' interests.”

A major OFT focus will be the commercial off-the-shelf software market, including management information and revenues and benefits systems that may be used by a range of public sector organisations, such as schools and local authorities. A second priority will be to examine outsourcing service providers.