Breathtaking cost cuts are on the way

Forget, if you can, levels of government borrowing. Put aside the rapidly shrinking size of the UK economy. Ignore for now the emergence of deflation.

If you work in public sector IT, there is only one number that will matter for the next five years – £7.2bn per year.

That is the target for cost savings – or as they are officially called, “efficiencies” – that must be achieved by 2014 in back-office and IT systems in Whitehall, local authorities, and every other public body.

That is going to be the only reality that matters for public sector IT professionals. And nothing will be considered to be off the agenda to achieve those figures.

Offshore outsourcing is now politically acceptable, encouraged even – if the successor to the Child Support Agency can have part of its systems developed in India, any project can.

Shared services, for all the organisational upheaval and cultural changes it implies, is only going to accelerate.

And the new, relentless mantra will be standardisation. The aim is to ensure that “all new IT infrastructure is reusable across the public sector,” according to the Operational Efficiency Programme report released last week to coincide with the Budget.

There are those who will argue that the cuts being enforced to pay for bailing out the economy are long overdue actions anyway. The amount of duplication and waste in government IT is a longstanding issue.

But that £7.2bn represents more than 20 per cent of the existing budgets – a massive challenge, and one that will surely be hard to deliver from efficiency improvements alone. Innovation will undoubtedly suffer.

At some point, the risk of services being impaired too, especially during transitional periods, must be faced. It seems likely that the number of IT professionals working in the sector will fall significantly.

We are all tightening our belts for the uncertain times ahead. For government IT, now is the time to take some serious deep breaths to prepare for an unprecedented squeeze.