Technology programmes have a central role in policy objectives and are crucial to the public sector efficiency reforms needed if the government is to meet its investment commitments without raising taxes.
The government says that more than half the projected £21.5bn Gershon efficiency savings by 2008 have already been made, and the next set of goals are to be included in the Comprehensive Spending Review (CSR) departmental budgets for 2008-11.
Chief secretary to the Treasury Stephen Timms is leading the CSR negotiations and is closely involved in funding plans to improve public services.
He spoke exclusively to Computing in the run-up to this week’s Pre-Budget Report about the role of IT in the government’s plans.
We are now halfway through the Gershon review period. What happens next?
I don’t want to give the impression that this is in the bag; there are still some difficult tasks to accomplish to get to the £21.5bn target by the end of the period in 2008, but we are on track, and clearly this exercise is making an important contribution to freeing resources for important services.
We want to build on that for the CSR, because although there will be real growth in public spending in the 2008-11 period, the rate of growth will be much slower than in the past few years so there will be an even greater premium on efficiency savings as an important contribution to improving public services.
How important will shared services – multiple departments and agencies sharing administration systems such as finance – be to improving government efficiency?
I have written to all secretaries of state to tell them we will be expecting each department to be able to exemplify five per cent year-on-year efficiency savings in administration and three per cent year-on-year overall value-for-money savings from 2008.
The CSR budgets will be set on the assumption that these rates will be achieved.
Gershon has been a success and we are confident we can build on that in the CSR. So we are asking departments to go further in terms of administration and value for money than is the case in the Gershon exercise.
It is for departments to work out how they are going to do it. The Treasury and [Whitehall procurement agency] the Office of Government Commerce are promoting shared services, and that is one of the main ways of contributing to the savings we need. But there is no separate savings target for shared services.
One of the issues raised by commentators on government IT is that the kinds of business change programmes needed to deliver these savings often require upfront investment. How will these investments be possible in such a financially straitened climate?
The current CSR system is geared up better than the old annual budgeting because it is a three-year process, so there is the ability to look at the impact over the full period.
So something that pays off over three years is still attractive for departments, even if in year one there is an upfront cost.
But of course there will be initiatives that will need longer to reach their full benefits. In the departments where we have already agreed the CSR settlements, we have provided some modernisation funding.
There may well be some departments whose settlements will be announced next year which will have some access to that funding as well, but those discussions are continuing.
A crucial factor will be the government’s ability to deliver technology projects successfully. How important was the recent report by the National Audit Office (NAO) on successful IT programmes in establishing best practice?
The NAO report is a good, balanced analysis and a helpful corrective to the received wisdom about government IT projects, because we tend to hear only about the things that go wrong.
The report shows a growing portfolio of successful projects that is contributing to significant improvements in value for money and in the quality of public services.
In many ways the real importance of the NAO report is in drawing attention to the large number of successes in business change around government.
One of the problems that is often highlighted is the disconnect between political timetables and the practical realities of developing, testing and implementing complex IT systems. Are those different agendas irreconcilable?
We have to come up with a system that can do the job that is needed, in the time that is available. I am sure it is possible to get those judgements wrong, but the point is that we should get them right – and I see no reason why that is not achievable. It may well be that politicians think in periods of four to five years, but I see no difficulty in managing projects on those timescales. There is greater flexibility in the thinking of ministers than some of these concerns might imply.
Government plans for better services
* The Gershon Efficiency Review stipulates annual efficiency savings of £21.5bn by 2008. According to figures released by the Treasury last week, £13.3bn of savings have been made so far.
* This week’s Pre-Budget Report includes requirements that departments make extra efficiency savings of five per cent a year for the three years after Gershon. Shared services – the use of common administration systems by multiple departments – will be a major growth area.
* The review by former HM Revenue & Customs chief executive David Varney, published this week, includes recommendations that focus on the use of technology to improve the responsiveness and efficiency of public service delivery.
* Implementation of the Transformational Government strategy is continuing, with the first annual report to be published in January. Key elements of the strategy are joined-up government and shared services.
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