Government slashes ICT spend by £316 million

News 23 Jan, 2013

National Audit Office hails success of spend reduction plans, but suggests more can be done.

The Government reportedly spent £316 million less on ICT after making a concerted effort to curtail its technology spending during 2011-12.

Since coming to power in 2010, the Government has embarked on several initiatives to help drive down the cost of ICT procurement, such as reviewing and renegotiating deals exceeding £5 million and through the sharing of certain infrastructure services.

According to a report by the National Audit Office (NAO), these initiatives have reduced ICT spend by £316 million in 2011-12.

It is difficult for government to make changes with ICT suppliers when major contracts are not expiring for a few years.

The Government has also encouraged departments to pool resources to negotiate deals with ICT suppliers, which the Cabinet Office claims has generated savings of £348 million.

However, the NAO said it was unable to validate its findings, but conceded the move has saved departments money.

In the report, the NAO explained: “This has helped departments to claw some money back, renegotiate contracts before they expire and, overall, spend less than they otherwise would have done on ICT.

“[But] the Cabinet Office’s processes were not fully mature in 2011-12, but it has taken steps to improve the accuracy of the savings from 2012-13 onwards,” it continued.

The report also claims the Government is on course to exceed the £440m million spending target it set itself in October 2011.

“In October 2012, the Government announced that, subject to audit, it had already saved £410 from these initiatives in the first six months of 2012-13 and is expected to save a further £200 million by the end of March 2013,” the report added.

As part of the ICT shake-up, Government departments have also been encouraged to procure more products and services from SMBs, but it is not yet known how successful this has been.

“It is difficult for government to make changes with ICT suppliers when major contracts are not expiring for a few years. However, work is under way to reduce its dependency on single large-scale contracts,” explained the report.

“We found that suppliers we spoke to in 2012 were less positive about their relationship with the Government than those we spoke to in 2011...[and] were frustrated at the slow pace of change and focus on cost-cutting.”

Amyas Morse, head of the NAO, said the Cabinet Office has made a good start with its ICT spend reduction plans.

"However, it needs to develop a more comprehensive assessment of the impact and effectiveness of its ICT and procurement reform initiatives,” said Morse.

"The big challenge will be to move from savings initiatives to achieving digital transformation of the civil service and the public services it provides."