IT is essential for Whitehall efficiency

More than £20bn of costs can be stripped out of Whitehall by 2007-8, according to the Efficiency Review led by ex-Office of Government Commerce chief executive Sir Peter Gershon.

This week's Spending Review announcements from Chancellor of the Exchequer Gordon Brown are betting further increases in public service investment on the 'efficiency gains' to be made by implementing Sir Peter's recommendations.

In the previous Spending Review in July 2002, central government technology investments included multi-million pound programmes for the NHS, the criminal justice system and local government.

The latest Spending Review period has less of a technology focus, but Sir Peter's efficiency plans have IT at their heart.

There are two main elements to the role of technology in his proposals.

First, Gershon finds much scope for centralising and streamlining departmental back office functions, using technology to free up staff time to concentrate on front line service delivery. Second, departments must outline plans to generate tangible savings from the IT investments already made, mainly around egovernment transactional services.

'As the Chancellor noted in his 2004 Budget speech, £6bn has been invested in the 2000 and 2002 Spending Reviews in modern technology. However, relatively little emphasis has been given to the efficiencies that could be delivered by realising the full benefit of these investments,' said Gershon.

But there is a danger in tying IT-enabled efficiencies too closely to staff reduction, Institute of Directors senior policy advisor Jim Norton told Computing.

The co-operation of civil service employees is vital if the process changes needed to achieve the most from IT implementations are to be realised, he says.

'Part of the problem with extracting efficiencies from IT in the public sector is that the government hasn't put any money into explaining to employees why it might make their jobs more interesting and improve the services delivered,' said Norton.

'There is an unspoken fear that IT is just a means of getting rid of staff - which is now brought into focus. So unless the government shows it can deal well with the people who are displaced, then all this will do is get resistance to the process change needed to make systems work properly,' he said.

There are huge savings to be made, but how Gershon's recommendations are implemented is critical and must be in a spirit of co-operation not confrontation, says Norton.

Intellect director of public sector Nick Kalisperas says the Efficiency Review does not provide a clear strategy for how egovernment services are to be developed in the future.

'The implication is that investments already made in IT haven't delivered the benefits they should have,' he said.

'Essentially it is saying we need to get more value for money from IT. That means we have to have a strategy in place and recognise these are not IT projects but business change projects that have impact on other systems and processes in the department.

'If the government is going to get rid of 100,000 civil servants, and improved IT is to drive that forward, then realistically we need a strategy for what type of egovernment we want, what the vision is and what sort of services we need,' said Kalisperas.

The government should not focus purely on cost savings but should evaluate IT-enabled efficiencies in the context of improved services, says Eric Woods, government practice director at Ovum.

'Retaining a focus on improving services and the notion of the citizen at the centre of process is important because the government can then look at the rationalisation of processes in a consistent way,' he said.

'The danger is government doesn't address the real problems, of silos and duplication, which is where a lot of the savings will come from.'

What the experts say

Gordon Brown, Chancellor of the Exchequer:

It is precisely because the public sector has invested £6bn in new technology, modernising our ability to provide back office and transactional services, that I can announce, with the detailed plans Departments are publishing for the years to 2008, a gross reduction in civil service posts of 84,150.

Sir Peter Gershon, author of the Efficiency Review:

As the Chancellor noted in his 2004 Budget speech, £6bn has been invested in the 2000 and 2002 Spending Reviews in modern technology. However relatively little emphasis has been given to the efficiencies that could be delivered by realising the full benefit of these investments.

Jim Norton, senior policy advisor, ebusiness and egovernment, Institute of Directors:

There are savings to be made, but to do so the government has to look more radically at the way it delivers egovernment services and put some money in to transform those services, to make them relate better to both the people receiving them and the people delivering them.

Nick Kalisperas, director of public sector, Intellect:

There has been an explicit link, both at the time of the budget and again yesterday, between efficiency savings reducing civil servant numbers and increased IT implementation and value for money from investments already made. If that argument is to hold, we need a clear strategy for egovernment and that needs to be joined up across Whitehall.

Eric Woods, government practice director, Ovum:

There will be an unprecedented scrutiny of the benefits of IT in the next few years and all those areas that have had significant investment in IT are expected to show efficiencies. But this has to be put in the perspective of the ability to improve services. Without that, the danger is government doesn't address the real problems, of silos and duplication, which is where a lot of the savings will come from.

Whitehall's commitments to IT-focused efficiency by 2007/8

• Department of Health - to make annual savings of £6.5bn, including making better use of staff time through the modern IT infrastructure being developed by the National Programme for NHS IT and shared back-office functions
  
• Criminal justice departments - to make annual savings of £2.3bn including benefits from the £2bn Criminal Justice IT programme
  
• Ministry of Defence - to make annual savings of £2.8bn, including £330m through rationalisation and information-enabled business change
  
• Foreign & Commonwealth Office - to make annual savings of £120m including £25m delivering improved IT to increase productivity
  
• Department for Environment, Food and Rural Affairs - to make annual savings of £610m including rationalising delivery through the £30m Rural Development IT programme and £33m to be saved through technology-enabled improvements for commercial contracting
  
• Department for Education and Skills - to make annual savings of £4.3bn including benefits generated through investment in IT and reducing administrative burdens
  
• Northern Ireland Office - to make annual savings of £90m including rationalising back office functions, investing in core IT infrastructure and the Causeway technology programme for streamlining criminal justice
  
• Chancellor's Departments - to make annual savings of £550m including rationalised back office functions through increased use of IT
  
• The Cabinet Office will make savings of £25m including reviewing back office systems and implementing reforms in IT