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.












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