The Department of Work and Pensions (DWP) is to make wide-ranging changes to its IT infrastructure in an effort to achieve efficiency savings equivalent to £1.4bn imposed by the previous Labour government, under the five-year Comprehensive Spending Review, currently in its final year.

The Department has suffered from poorly executed IT projects in the past and more recently operations have been bothered by strikes by Unite worker at HP's EDS division.

In its recently published business plan for 2010-11, the DWP is to negotiate a new contract for desktop services from September 2010 valued at some £200m per annum over six years, which the report says “will provide savings of some 20 per cent.”

The department signed a desktop services contract with Fujitsu in February this year and an infrastructure contract with BT in the same month.

However, the new coalition administration has said that all government IT contracts signed this year will be reviewed by chancellor George Osborne in an attempt to prevent the kind of profligacy that plagued the likes of the DWP previously. But this has raised concerns among leading legal experts as to the legality of cancelling or substantially changing previous contracts signed by suppliers in good faith.

Even if these contracts aren't scrapped, the department says it is looking for efficiencies worth five per cent in all its back-office contracts.

The report, essentially a break-down of how the DWP will spend its £10.3bn budget this year, commits the department to driving down IT costs by improving utilisation and reducing consumption and unit costs of resources.

Specifically, the department says it wants to ensure that 90 per cent of IT enhancements are delivered to agreed scope and time; to keep system downtime beneath 0.5 per cent; achieve a ratio of 104 personal computers for every 100 staff; and ensure its IT suppliers are scoring at least four out of five on its supplier performance index.

The previous Labour Cabinet Office asked the department to take on the administration of the Civil Service Pension Scheme for the whole of the Civil Service under its Shared Services remit, with the aim of delivering administrative savings of around £70m over a 10-year period.

The department also plans to dispose of a further 10 buildings saving £7m per annum. In 2009 the DWP reduced its eight London head office buildings to two and vacated a further 23 buildings saving £12m per annum. The overall aim is to reduce spending on head office space by 20 per cent by 2014.

The report says the DWP will make better use of its data, especially when it comes to dealing with benefit fraud, “to reflect best practice in the private sector”, by matching local authority data with that held by credit reference agencies to identify potential fraud and error in Housing Benefit and Council Tax Benefit.

In terms of dealing with the public, the department has committed to pushing more of its services online, such as making it easier for employers to advertise vacancies online, matching customer information with employer requirements, and enabling customers to claim income-based Jobseeker’s Allowance and State Pension online.

Here, Directgov will play a large role, with 95 per cent of citizen-facing information and services transferred from separate government web sites to Directgov and implementation of cross-government initiatives such as Access to Public Services, Tell Us Once and ID assurance.

Completing the final elements of IT changes to the department’s and HM Revenue & Customs’ systems is also envisaged this year.

The DWP has also said it will promote other electronic channels such as text messaging for citizens to inform the department of changes in their circumstances.

For its employees, the department has said it will use IT to enable flexible working and look to cut travel costs with videoconferencing.