Government saves £490m on ICT and digital

Government saves £490m on ICT and digital

Cabinet Office minister Francis Maude revealed savings across government have reached £3.1bn

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The government has saved some £490 million on ICT and digital spending in the first half of the financial year.

Cabinet Office minister Francis Maude announced this week that across all government departments £3.1 billion has been saved, and he expects this to rise to £8 billion by the year end.

The savings are still a fraction of annual government ICT spend - where estimates vary between £17 billion and £20 billion. Using these estimates, savings are between 2.4 percent and 2.8 percent of total ICT spend (although it is worth remembering that these are the half year results). 

These figures build on the £5.5 billion of savings in 2011/12 - £249 million of which was attributed to ICT and digital.

“As a result of the Government’s strict financial controls and business-like approach, interim results show departments have saved £3.1 billion so far this financial year - including savings of £409m from ICT and £81m from the Government Digital Service – putting us on track to save £8 billion by the end of the year,” said a spokesman for the Cabinet Office.

“We welcome scrutiny as a means of helping us to deliver even greater savings for taxpayers, which is why we will invite independent auditors - who report to the Audit Committee - to perform a full audit of our full year figures, including the contribution of ICT-related savings, at the year end.”

The savings are driven by the Cabinet Office’s Efficiency and Reform Group (ERG). The ERG applied spending controls to cut expenditure by departments on IT contracts, property, marketing, temporary staff and consultancy.

In recent months, the government has worked to improve internal operations and make the delivery of public services more cost-effective via the work being done by the Government Digital Service, which recently launched the government single-domain website, GOV.UK, for example.

Furthermore, it has targeted some of its large ICT suppliers, such as SAP and Microsoft, to renegotiate licencing and maintenance contracts. It has trimmed  £70 million of its software bill up until 2015 with these two suppliers alone.

Outside of ICT, government has achieved £680 million of savings through a moratorium on consultancy and contingent labour spend, £170 million from reductions in government property and £900 million from salary cost.

“We have said we want to be saving £20 billion a year by 2015 and savings of this magnitude cannot come by trimming budgets here and there. That’s why we are working to transform Whitehall into a leaner, more efficient machine that manages its finances like the best-run businesses,” Maude said this week.

“We are taking the tough decisions required to ensure that Britain can compete in a global race. We cannot go back to the old days of waste and profligacy.”

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