£6.2bn Whitehall cuts hit IT with tech spend slashed by £95m

Cuts to back office IT, tech research and Stem training spend announced

IT spending is to bear the brunt of the Treasury's drive to reduce administration costs across Whitehall.

Central government will cut spending on IT by £95m, the Treasury has said, as part of its plan to slash £6.2bn from government outlay during this financial year.

The cuts will be combined with an immediate spending freeze on any new IT projects worth more than £1m, with the moratorium overseen by the new Efficiency and Reform Group, which is being set up as part of the Cabinet Office.

While the Treasury has not broken down how the £95m of cuts will be distributed across government departments, details of IT-related cuts revealed this week include the Department for Business, Innovation and Skills (BIS) removing £100m from its annual running costs, the majority of which will be focused on reducing non-staff-related costs such as IT.

HM Revenue & Customs will also find £125m of savings, part of which will come from renegotiating contracts with IT suppliers and cutting consultancy spend.

The Treasury's £6.2bn savings drive will see cuts to IT and back office spending across Whitehall
(Photo credit: a.drian via Flickr under the following Creative Commons Licence

The Department for Work and Pensions will save £70m by stopping or delaying some IT projects and reducing its IT consultancy spend, as well as renegotiating medical and IT services contracts to save a further £25m.

The Foreign and Commonwealth Office will realise £55m of efficiency savings, partly by reducing spend on consultancy and support functions, and increasing the amount of collaborative procurement with other government departments.

The Qualifications and Credit Framework, an agency of BIS, will save £11m by ditching plans to build a new IT system in favour of building a joint system with the Learning and Skills Council.

The Department of Education's 14-19 Reform body will trim about £11m from its spending on back office functions, including IT.

Whitehall also announced today it will save £1.7bn by delaying and stopping government contracts and projects, and by renegotiating contracts with 70 suppliers, with tech-related projects likely to figure in this.

While details of precisely which schemes will be affected have yet to be announced, Whitehall confirmed Labour's flagship IT projects - ID cards, the National Programme for IT and the e-Borders scheme - will not figure in the £1.7bn savings.

Tech research also fell victim to today's cuts with the biggest loss being the Institute of Web Science. The centre, announced earlier this year and aimed at putting the UK at the forefront of the development of semantic web technologies, will be scrapped, saving £5m.

The agency designed to promote the use of technology in education, Becta (the British Educational Communications and Technology Agency), will also be closed down, saving £10m this financial year and £65m per year in future.

And the government will also reduce the number of new higher education places that will be created with priority for Stem (science, technology, engineering, maths) students this year from 20,000, as planned under the Labour government, to 10,000.

Announcing the cuts, chief secretary to the Treasury, David Laws, said: "This action is designed to send a shockwave through government departments, to focus ministers and civil servants on whether spending in these areas is really a priority in the difficult times we are now facing."