Cloud and iPads identified as secrets of leaner government

How tech is driving savings in Whitehall's biggest departments...

As government departments tighten their belts, senior figures in Whitehall have revealed how technology is becoming cheaper to run and delivering more efficient public services.

The government will exceed Treasury targets to cut £3.2bn from its annual IT spend by 2013-14, Dr Martin Read, board member of the Cabinet Office efficiency and reform group, told the Government ICT 2011 conference in London yesterday.

Read said the government was on course to trim about £1bn from its IT spend this financial year, following the renegotiation of contracts with its largest suppliers, most of which are tech vendors, and the scaling back and cutting of major IT projects.

Having reduced spend, Read said the key to further efficiencies lay with revising how the public sector uses technology: "The challenge is now to do the clever bit, approaching the way we do IT in a different way."

There was no shortage of suggestions for new ways government will "do IT" in future, ranging from using cloud computing to delivering public services online, and from using shared services to using more smaller suppliers.

Shared services and cloud computing are among the technologies expected to provide major savings in Whitehall spending
(Photo credit: Shutterstock)

Mark O'Neill, CIO for the Department for Culture, Media and Sport and the Department for Communities and Local Government (DCLG), said cloud computing will "disrupt" the way government uses IT by opening up access to online services capable of outperforming and undercutting bespoke alternatives from its suppliers.

"There is a fundamental disconnect between the IT available in the corporate space and what is available to people at home," he said.

"With [online finance management service] mint.com, you probably get better reporting than somebody running a multimillion-pound ERP system... with Skype faster and cheaper IP telephony than in a corporate environment."

O'Neill said new cloud services could help break the stranglehold major IT suppliers have on the public sector, where more than 60 per cent of government IT spend goes to six large vendors.

"It is about giving the existing systems-integrator model a good kicking," he said, adding: "Cloud gives us the ability to disaggregate the deals we have built."

Cloud isn't the only new tech being considered. O'Neill said if the DCLG got rid of every printer and gave each member of staff an Apple iPad instead, the money saved on printing costs would cover the cost of the iPads within 18 months.

Two departments that are already well underway with technology-led savings drives, the conference heard, are...

...HM Revenue & Customs (HMRC) and the Ministry of Justice (MoJ).

HMRC manages one of the largest outsourced IT operations in Europe, the £750m-a-year Aspire contract that provides the vast majority of its IT services.

Since the contract began in 2004, it has been renegotiated to reduce costs to HMRC - with the latest settlement expected to cut annual costs by £161m from 2011-12.

Speaking at the conference, Mark Hall, deputy CIO of HMRC, said of those £161m savings, £62m had come from reinvesting money it had saved in new efficiency measures.

"We had a £49m opportunity... reinvested it in decommissioning and simplifying our estate, which in turn yielded us another £62m," said Hall.

"We are replacing 25,000 PCs and are replacing the whole printer estate across the enterprise without spending one pound of additional investment. All that money has been found from savings."

He said the HMRC policy of reinvesting savings would help it meet Treasury demands to cut its IT bill by a further £75m, on top of the £161m annual savings HMRC has already agreed.

Ultimately, HMRC plans to reduce the 600 or so systems it relies on to just 13 core tech platforms.

"We recognise we have to switch off and streamline legacy IT," said Hall.

"That is bringing us more simplified systems, more standardised systems and reflecting in technology that is allowing us to work better as a department."

At the MoJ, the department is breaking down business silos and moving towards shared service delivery.

MoJ CIO Andy Nelson said: "Today the MoJ runs 20 major datacentres, but why can't we run that workload out of two or three instead, and use one or two suppliers rather than the many we have today?

"In doing that we have greater standardisation, the joining up of applications and infrastructure, and that allows us to join systems across the MoJ."

Nelson said the department plans to build a single technology platform, likely to be Oracle E-Business Suite 12, that will run all finance, HR, payroll and procurement functions across the MoJ.

Parts of the MoJ will begin using the platform next year, ahead of a rollout across the department. The MoJ expects the move to the shared services platform will save £135m over 10 years.

"The approach will be that services should be provided [centrally] through corporate services, unless proven to be provided better locally," Nelson said.

"That's a very different position from where we've come from."