New government IT chief targets billions in savings

Freshly appointed government IT chief Martin Read will head up a wide-reaching programme to slash government spending over the next 12 months through IT and back office efficiencies.

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Freshly appointed government IT chief Martin Read will head up a wide-reaching programme to slash government spending over the next 12 months through IT and back office efficiencies.

The Operational Efficiency Programme, announced by Treasury secretary Yvette Cooper on Thursday, is a far-reaching programme of reforms to cut costs and improve "value for money".

The IT element of the Operation Efficiency Programme will look at:
• Standardising IT business processes such as financial reporting, to facilitate software integration and improve service provision at lower cost.
• Improving the success rate of the government’s delivery of major IT projects, looking at:
• Definition of objectives, the selection process and the delivery of value;
• Governance, including the Gateway Review process and the role of internal and external audit; and
• Leadership and what skills are required for all senior positions.
• Improving IT procurement by examining the cost and timescale to both the supplier and the client, the use of external consultants and managing demand for IT.
• Driving up supplier performance and cutting cost, using the Common Assessment Framework process for calibrating supplier performance as a starting point;
• Boosting the use of benchmarking and best practice standards across back office and IT, including ensuring that purchasing authorities do not exceed benchmark prices, making greater use of open source, increased re-use of existing systems, processes and capabilities and preventing suppliers from selling back intellectual property which already belongs to the public sector.

The programme covers five strands, which includes: back office and IT; collaborative procurement; asset management and sales; property; and local incentives and empowerment across the public sector.

Savings from IT will be a key area that will look beyond back office costs in central government departments, and review the wider public sector, including executive agencies, non-departmental public bodies, the NHS and local government.

Read's prime focus will be on how to get better value out of large IT projects. This could encompass helping the government to exit troubled IT projects.

The aim is to build on the cost cutting made by the government under the Gershon Review in 2004, where £23 billion has been saved so far. The Treasury said the IT savings would "go further" and "the best businesses are still ahead" of the government.

"Private sector experience suggests significant savings of 10 to 50 percent may be possible, with an estimated £7 billion spent on finance and human resources functions alone in the public sector. This strand will look at how we can make progress towards achieving these savings," said Cooper in a statement.

Read has a background in the private sector, including Boots, Asda, Logica and British Airways. He hopes to bring this experience to the government. "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."

Under his remit, Read will provide savings through standardisation of IT-enabled processes, such as financial reporting.

This would improve software integration and services at a lower cost. Read will also "improve the success rate" of the government’s delivery of major IT projects, by tightening up initial scopes, governance and leadership".

Improving IT procurement - including use of external consultants – is another target. Read will be expected to put pressure on suppliers to improve performance "while substantially reducing cost".

The cost reduction programme is in addition to the Comprehensive Spending Review that is already underway, which has a £30 billion savings target over the next three years.

The Treasury said Read's efforts will also build on a number of initiatives, such as the CIO Council’s Supplier Management Initiative.

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