Government CIO role abolished as era of big outsourcing deals draws to a close

Stephen Kelly (pictured), the government's chief operating officer, has abolished the role of government CIO, currently held on an interim basis by Andy Nelson, who is also CIO at the Department for Work and Pensions, as part of the ongoing streamlining and devolution of IT decision-making across central government.

Mike Bracken, executive director of the Government Digital Service (GDS), will also lead a review of IT governance structures, examining the role of the CIO delivery board and the CIO council in particular.

The belief is that current structures are too bureaucratic and slow, bogging down senior staff in relatively trivial decisions, and prevent CIOs from making quick decisions.

"Some of the [governance] boards add value and some of them don't. We want to move quickly but the structures are too slow. The governance structure is actually stopping things from going forward," said Bracken.

The announcement also coincides with a major change in approach to procurement of IT services, with big outsourcing contracts such as the HMRC's Aspire mega-outsourcing contract with Capgemini being phased out in favour of contracts that are automatically more flexible.

The aim, added Kelly, is to move to a "more variable cost model" in which the expectation of ongoing changes to systems is built-in rather than a chargeable extra.

The IT services "oligopoly" of 12 big, vertically integrated IT services companies, meanwhile, which accounted for up to 85 per cent by value of all IT contracts across central government in 2010, will also be expected to slash their costs accordingly.

Indeed, according to Kelly, while 70 per cent of the government's major outsourced IT contracts are held by just 10 companies, two-thirds of those contracts are due to expire by 2014, when the government hopes to squeeze out major costs savings.

For example, the Department of Health has saved some 96 per cent on the cost of web hosting and IT maintenance simply by shifting to a combination of WordPress hosted on gov.uk, with the rest of the web estate being looked after by public-sector IT specialist dxw. Costs were slashed from £800,000 to just £25,000.

Other IT contracts have seen cuts from £50m to £942,000 and from £4m to £45,000.

But HMRC's £1bn per annum contract with Capgemini - which has continued in the mould established in one of the first big, central government outsourcing deals in the mid-1990s - is also in their sights, admitted Kelly.