[tsimionescu]

The economies of scale would work exactly the other way than you think. Right now, the same company can sell the same solution for the same money to 20 government agencies, ones that have broadly similar needs, because it costs too much for anyone else to compete with them. The company then extracts massive profit from every subsequent project, with none of the savings going to the government. And even if a new player wins some of the contracts, they have to start from scratch and thus need to charge similar prices.

If there was a government IT office, it could build this in house, and after the initial investment in building the base infra, re-use it almost for free in every government agency in the same country. In the context of the EU, they could even make moves to share this code with other governments, passing on the savings there as well.