If GDS was the IT department for the whole of government and the departments became a team of policy analysts and ministerial support then you'd be right.
Overwhelmingly the core information management and processing is on the local IT infrastructure of each department. GDS is unifying the web presence and some of the citizen identity systems, its not fundamentally taking over the core information systems of state.
EDIT: To be clear, I think something like GDS should take a long hard look at the core information systems of state and start again with a clean slate breaking the technology and the data out of the policy silos.
