Whitehall IT cuts are "vague and aspirational"

But some Budget announcements will benefit the IT industry

Several Budget announcements to "benefit the IT industry"

Despite widespread expectation that government departments would announce specific IT cuts following the Budget yesterday, most departments announced " vague and aspirational" cost savings, according to an industry insider.

In recent weeks there has been mounting pressure for the government to drop the Summary Care Records system from the NPfIT, however the Department of Health did not mention this element of the programme, re-iterating instead the “£100m to be saved by offering greater choice to local hospitals”. This saving is not new and is part of the £600m reduction in lifetime costs of the programme announced in December last year.

The Home Office said it anticipated £80m in savings from a 20 per cent reduction in IT expenditure. Some £40m will come from the successful renegotiation of existing contracts for basic IT services.

The national framework approach to police procurement, combined with the Information Systems Improvement Strategy (ISIS), is anticipated to produce savings of £400m, with increased standardisation across all forces and streamlined provision of business support functions predicted to generate a further £75bn.

The Ministry Of Defence said it would save £130m by replacing legacy IT systems, but again was unspecific regarding which systems would go.

Defra said that as part of the £100m savings it hopes to achieve in finance, human resources, ICT and procurement administration costs it will “stop low priority activities such as some IT projects”.

Again, it did not detail which IT projects would be cut, but the project that has received the most negative publicity is the Rural Payments Scheme, which could be for the axe.

Aside from the above details, all departments said they would make savings via the Operational Efficiency Programme announced in May 2009, with a focus on reducing the c ost of back office functions, reducing IT spend, improving collaborative procurement of IT, and developing the internal IT capability within the public sector, among other initiatives.

One industry insider said the releases were “vague and aspirational, and an example of the government pulling the wool over the public’s eyes in advance of the election". He also said that the IT industry had been misled into believing that the government would be announcing some specific proposals prior to the election, with Gordon Brown making reference to IT savings in the Budget in his Digital Britain speech three days ago [22/03/10].

The European vice president of the Global IT body CompTIA was slightly more positive however, saying: “The budget focused largely on policy, with few real surprises, but it does offer opportunity for the industry."

He cited three areas that could spell good news for IT. He argued that The Backing Young Britain initiative, which is set to run until March 2012, will help provide an opportunity to bring more young people into the IT industry, which is struggling to attract candidates from this age group. The scheme guarantees a job, training or work experience to every young person who has been unemployed for six months.

The second area that might benefit the industry is the new support offered for green technology in the form of The Green Investment Bank. The IT industry will support many new green technology projects.

Finally, the 15 per cent increase in government contracts to SMEs will benefit the IT industry and government departments looking to procure IT services. IT SMEs will see more opportunity to win government contracts – but must be aware that they will be competing with large companies, and do their research properly. The departments will be able to break up big contracts among SMEs which opens opportunities for better service and access to new expertise.