The government has highlighted £1.4 billion savings from operational efficiency improvements, substantially aided by IT changes, in the Budget. The cuts include £500 million cost removal from ongoing technology programmes.
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The savings will be targeted by the 2012 to 2013 financial year, according to yesterday’s Budget, and will go alongside other process improvements.
The ailing £12.7 billion NHS National Programme for IT will have £100 million taken off its costs by that date, as part of £600 million cuts already announced over the lifetime of the programme. The lead suppliers on the programme are CSC and BT.
The changes will come from a “more flexible delivery model and greater choice to local hospitals”, the Budget stated.
Some £130 million will come out of the near-£8 billion Defence Information Infrastructure Programe, with HP-EDS, by replacing legacy IT.
A further £150 million will come directly from collaborative IT purchasing at the Ministry of Defence, outside of the DII programme, as well as from slashing consultancy spending.
Also included, in the changes to IT programmes, is the Home Office, which will cut £80 million from costs through IT expenditure reduction and the renegotiation of service contracts. But £190 million more in IT programme cuts across the government has not yet been detailed.
Aside from specific programme changes, legacy system rationalisation at HM Revenue and Customs will cut over £100 million from costs.
Some £180 million will be taken from contract costs, including IT, at the Department for Work and Pensions. The department promised to “work more closely with suppliers” and reduce demand.
The Department for the Environment, Food and Rural Affairs will slash £100 million from finance, human resources, IT and procurement administration costs, “by stopping low-priority activities such as some IT projects and improving efficiency”, it said.
Some £70 million savings will also come from the Department for Transport, as it streamlines back office functions and cuts consultancy spending.
Shared services will also play a part, with the DWP, Ministry of Justice and the Ministry of Defence leading the way.
Around £130 million will be taken from back office, procurement, consultancy and marketing at the Department for Communities and Local Government, as it becomes another department to move to “joined up service delivery”.
The Department for International Development will share services with other overseas offices, and develop more in-house IT skills, contributing to efforts to cut £150m from its budget.