Government looks to save up to half on IT

The government today launched a new operation efficiency programme, which will seek to deliver billions of pounds in public spending savings, including efficiencies from its back office and IT operations.

Back office and IT features as one of the initial five areas the new programme will focus on, where the government said it had already made major savings in support services through the Gershon government efficiency programme that advocated more use of cross-departmental shared services.

For example, it said the Ministry of Defence has saved £45 million a year by rolling out a single personnel management system for all three armed services.

But the Chief Secretary to the Treasury Yvette Cooper said: “We need to go further. We know that the best businesses are still ahead of us, and we want to challenge ourselves to raise our level of ambition in this area.”

The back office and IT area of the programme will seek to emulate the private sector, whose experience suggests significant operational efficiency savings of 10 to 50 per cent may be possible, according to the Treasury.

And, where the public sector spends an estimated £7 billon on finance and human resources functions alone, it said particular attention will be paid to how the government can get better value out of large IT projects.

Each area of the programme will be led by “an experienced figure from the private sector who will provide expertise and fresh ideas, and who will challenge the Government on its plans to ensure that they are as ambitious as possible”, Cooper said.

The back office and IT work will be led by Martin Read, non-executive director of British Airways and senior adviser to Candover Partners. Read was chief executive of IT services company Logica until 2007 and has also worked as supervisory managing director of the GEC-Marconi Radar and Control Systems group of companies.

Read said: “These [back office and IT] services form a vital part of any modern organisation. The private sector has made significant strides forward in this area in recent years and my work will examine the scope for the public sector to benefit from this experience, in order to deliver further efficiencies over the coming period.”

The other four areas of the programme include ‘collaborative procurement’, ‘asset management and sales’, ‘property’ and ‘local incentives and empowerment’. And the full Operation Efficiency Programme prospectus is published on the Treasury’s website.

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