Whitehall
Opposition parties are targeting government IT spend

Government IT spend moves up party agenda

While Labour seems content to throw more money at IT, the two main opposition parties are itching to cut back on funding

Written by Tom Young

The recent political party conferences had a sombre, thrifty tone thanks to worries about the global financial crisis. All parties are keen to present themselves as champions of frugality and critics of City excess.

Evidence so far suggests the technology sector has weathered the credit crunch better than most because of the key support it provides much of the private sector, but the latest round of political rhetoric indicated that contracts in the public sector may suffer as the government looks to cut spending.

Here, Computing takes a look at what the political parties said and what the industry thinks of their promises.

The Conservative Party

The party’s grandstand policy announcement was a two-year council tax freeze, funded by cuts in spending on consultancy and advertising.

Shadow chancellor George Osborne foresees a £500m reduction in consultancy and advertising costs in the Tories’ first year of government and £1bn in subsequent years.

According to the National Audit Office, Whitehall spent £1.8bn on consultancy in 2006 ­ the most recent accurate figures. The same report estimates that just under a third of this ­ some £570m ­ was spent on IT, with IBM, Logica, Accenture and PA Consulting the biggest recipients.

Assuming that cuts will be split evenly between advertising and consultancy, and that the ratio of IT to wider government consultancy spending stays roughly the same, this will mean a first year cut of about £53m in central government IT consultancy spend with a cut of £137m for every year thereafter.

A source at one large consultancy firm said that such cuts will not necessarily mean less overall spending.

“Given that the Conservatives will not abandon IT projects altogether, if they cut consultancy spend then they will need more in-house IT expertise and this is going to be more expensive,” he said.

Many departments, particularly the Department of Work and Pensions, have been able to cut staff thanks to increased spending on consultants, so saving money.

“Although the Tories have promised to ditch the National Identity Scheme as well as roll back the database state, they will still need to employ some expertise for IT infrastructure projects. This will be cheaper coming from consultants than from full-time staff,” said another source.

The Liberal Democrats

The Lib Dems have long been the most outspoken critics of the “database state”. In his speech to conference, treasury spokesman and former Shell chief economist Vincent Cable said the party would “stop the gravy train of management consultancy in government” and “stop questionable IT projects like that for the NHS”.

As well as halting parts of the National Programme for IT (NPfIT), the Lib Dems have specific policies that would end the National Identity Scheme and ContactPoint, often referred to as the Children’s Database.

They would also require every public sector worker on £100,000 or more to reapply for their jobs.

A source who has consulted on the NPfIT points out that the programme has actually under spent so far. “The cost of delays have fallen on the suppliers ­ that’s why Accenture and Fujitsu dropped out,” said the source.

Cutting consultant spend as well as reviewing the use of well-paid public sector workers runs the risk of eliminating all expertise from government, said Nick Kalisperas, public sector director at technology industry trade association Intellect.

“The influx of private sector workers to the public sector has been beneficial. There’s a danger of throwing the baby out with the bathwater here,” he said.

The Labour government

Perhaps unsurprisingly, not much was spoken about ongoing government IT projects at the Labour Party conference. Most of the focus was on the financial crisis. But while last year Gordon Brown talked up the National Identity Scheme, this year neither he nor home secretary Jacqui Smith mentioned it.

But actions speak louder than words. Recent press reports of a proposed Home Office database of communications, as well as a £50m tender for new child support systems, suggest that the government is not shy of forging ahead with further projects.

Private sector workers can only improve the efficiency of these projects, said Kalisperas.

“Though it’s expensive, often this expertise pays off in the long run,” he said.

  • Have your say
  • Send to a friend
  • Print this
  • Share

reader comments

related articles

Computing comment logoPublic Sector

Government will ignore IT at its peril

It is time politicians took IT seriously 16 Oct 2008

 

Government blames IT for education payment delays

Ed Balls points the finger at sub-contractor's IT systems after 92,000 teenagers fail to receive maintenance cash 15 Oct 2008

MPs slam MoD loss of 1.7 million records

And government warns that more losses could yet be uncovered 14 Oct 2008

Home Office turns down latest McKinnon appeal

Home Secretary informs lawyers of arrangements for US extradition 13 Oct 2008

Lib Dems applaud scrapping ID cards

Vince Cable is the latest politician to promise to end controversial ID cards and NHS schemes 21 Sep 2009

Accountants want Cable as chancellor

Our poll finds Lib Dem man popular with the profession 22 Dec 2009

Government tries to sweeten 10:10 rejection with £20m funding pledge

As MPs vote down Lib Dem proposal for public sector to sign up to 10:10, the government announces new funding to help Whitehall curb emissions 22 Oct 2009

related whitepapers

today's top stories

Police hunt for moles with security software

Lancashire Constabulary to monitor data input of 7,000 staff in bid to prevent intelligence leaks 09 Feb 2010

PaperlinX outsources IT and comms to Bull and BT

Paper company spends €22m on five-year deal for desktop management, helpdesk and datacentre services 05 Feb 2010

Social tools take KM to a new level

Technology expert David Tebbutt explains how – and why – organisations should integrate social networking tools into their knowledge management strategy 02 Feb 2010

EDS court defeat puts vendors on their guard

BSkyB’s victory in a long-running court case against EDS has serious implications for the IT industry 02 Feb 2010

Law firm monitors web traffic violations

Bucks declining global security appliance sales with unified threat management (UTM) platform deployment 01 Feb 2010

Advertisement

Security: The New Face of Intrusion Prevention
An outline of traditional IPS functionality, modern developments and how IPS can be deployed easily.

UK businesses’ attitudes to Cloud Computing revealed

Features results from a survey of over 200 Computing readers.

Advertisement

Keep up to date with the latest products, services and technologies from the world's leading IT companies; ITHound.com brings you over 6,000 white papers, case studies and analyst reports.

Advertisement

Newsletter signup

Sign up for our range of FREE newsletters:

More available - click 'submit' to view

Existing User

Newsletter user login:

Jobs

Related jobs

Job of the week

Job alerts

Sign up here

Find your next job

IT Salary Checker

Check salary here

Advertisement

Latest poll

Internet Explorer 6

Internet Explorer 6

Following recent concerns about the security of Internet Explorer 6 are you planning to phase it out?

View poll results

Latest audio and video articles

Tony McAlisterVideo

Video Q&A: Tony McAlister, CTO, Betfair - Part one

On changing the skills development strategy at the online gambling firm - part one of a two-part video interview 05 Nov 2009

Video

Nokia shows upcoming handset technologies

Mobile phone features of tomorrow take the stage 21 Oct 2009

Latest in-depth articles

Analysis

Police hunt for moles with security software

Lancashire Constabulary to monitor data input of 7,000 staff in bid to prevent intelligence leaks 09 Feb 2010

Businessman with eye patch, dagger and tie round head, sitting at laptopFeatures

Are you sure you're not a pirate?

It is alarmingly easy for an IT leader to unwittingly exceed the scope of a software licence, and the chances of being caught out have never been greater, as technology lawyers Mark Weston and Paul Gershlick explain 09 Feb 2010

Primary Navigation