What's on the Tory horizon for IT?

Osborne will be cutting costs

The Conservatives are well known for their opposition to identity cards and centralised health records in the NHS National Programme for IT. Such schemes have already been flagged as targets in David Cameron’s proposed new age of austerity. But during their party conference last week, the Tories firmed up their policies in a number of other areas that could have an effect on the IT community. Here Computing takes a look at what a future Tory government might mean for IT.

Business and tax

The Conservatives are traditionally the party of business and the arrival of former chancellor Ken Clarke as business minister will be cheering for many IT firms. Clarke is well known as a friend of small business, and stated in his speech last week: “I’ve always thought that the most important job of the Business Ministry ­ and the Treasury come to that - is to make it easier for the small businessman in the Midlands to make his living.”

As well as cutting red tape for small businesses, Clarke said the Conservatives are formulating policies to plug gaps in the venture capital market, and to provide more apprenticeships and training opportunities.

A particular aim is to develop science, technology, engineering and maths ­ the so-called STEM skills ­ and the Tories have brought inventor James Dyson on board as an adviser “to ensure that our innovations in science and engineering are translated into businesses, services and employment in this country,” said Clarke.

Clarke wants to develop the key areas of high technology manufacturing and the creative industries, both of which are heavily supported by IT, though he also wants to rebalance the economy away from financial services ­ the key paymaster for IT projects alongside the public sector over the past 10 years.

Another policy that will benefit larger IT firms is a cut in corporation tax from 28 per cent to 25 per cent. But both Cameron and shadow chancellor George Osborne have hinted they could go further, and some media reports speculate the rate could be brought as low as 12.5 per cent within the next parliament, should the Tories win.

Immigration

Immigration policy affects technology companies heavily ­ the IT sector brings in more workers under Labour’s points-based system than any other. The government recently tightened regulations to make it harder to bring in skilled immigrant workers, but the Conservatives hint they will go further. Shadow home secretary Chris Grayling told the conference: “We will set an annual cap on the number of people who can come and live and work here.”

EU law would prevent the Home Office restricting the number of migrants from eastern Europe as well as migrant family members, while capping refugee numbers was dropped as part of the “detoxification” of the Tory brand. That leaves skilled workers from outside the EU ­ a mainstay of many IT firms ­ as a potential target area for caps.

Education

Shadow education minister Michael Gove said a key plank of Conservative policy is to improve STEM skills. In his speech he said: “We will ensure that experts in every field, especially mathematicians, scientists, technicians and engineers, can make a swift transition into teaching so our children have access to the very best science education.”

It is not clear how Gove hopes to achieve this, though he did mention extending Labour’s Teachfirst programme, which encourages high-flying graduates to teach before taking up other jobs. He also said he will make exam standards tougher to improve skill levels.

The number of students taking A-level and GCSE IT subjects has been steadily falling for a number of years, and a lack of IT teaching skills is often cited as a key problem.

Although this does not affect the IT companies of today, better teaching will lead to a healthier industry in the future.

Whitehall IT under the Tories

Shadow chancellor George Osborne's commitment to public spending cuts is well documented, and IT departments will be key in reducing costs. Former Logica chief executive Martin Read's contribution to the Treasury’s Operational Efficiency Programme has already identified £3.2bn of potential savings to be made in the public sector IT bill, but Osborne is looking further.

He announced last week that he wants to cap civil servants’ pay at £187,000 – the prime minister's salary. This means that recruiting private sector IT leaders to oversee government projects would be a tough task – Richard Granger, the original director general of the NHS National Programme for IT, was reportedly paid around £290,000.

Given that Osborne has also made a commitment to reduce the use of consultants in Whitehall, this move has left many wondering where the senior IT expertise in the Civil Service will come from.