Former Micro Focus CEO Stephen Kelly appointed Cabinet Office COO

Stephen Kelly, the former CEO of Cobol tools software vendor Micro Focus, has been appointed government chief operating officer (COO) in the Cabinet Office. He succeeds Ian Watmore, who left in May 2012 to pursue non-executive and charity roles in the North West of England.

Senior government lawyer Richard Heaton had stepped into Watmore's shoes on a temporary, part-time basis.

As Cabinet Office COO, Kelly – described in the Daily Telegraph as "best friends with Francis Maude, the Cabinet secretary" – will effectively lead the Cabinet Office's Efficiency and Reform team.

He was originally poached from industry in mid-2011 to "mutualise" the public sector. However, the only evidence of success in that project would appear to be the delivery of MyCSP, the first "John Lewis-style" mutual to spin out from central government.

The Cabinet Office claims that MyCSP will save taxpayers "half the cost of administrating pensions for the 1.5 million Civil Service Scheme members" within a decade.

Kelly's new boss, Francis Maude, – not surprisingly – welcomed the appointment.

"I've always said government needs to function more like the best-run businesses and this new appointment, which will strengthen the corporate centre at the heart of Whitehall, is another step towards meeting that goal," said Maude.

He added: "Last year, the Efficiency and Reform Group helped departments save a staggering £5.5bn – or £500 for every working household in Britain. But we want to go much further in cutting waste, saving money and streamlining Whitehall... Together, we will save taxpayers even more money and improve the way government is run."

The role comes with a salary of about £140,000, according to a job advertisement placed in The Times newspaper in July.