Tories' £12bn savings plans include IT cuts

The NHS National Project for IT and the National Identity Scheme would be two projects altered or scrapped should the Conservatives win the election
Written by Tom Espiner, Contributor

Large government IT projects would be cut back as part of an effort to save £12bn by an incoming Conservative government.

Two of the projects that would be reviewed or scrapped should the Conservatives win power at the 2010 general election will be the NHS National Project for IT (NPfIT) and the National Identity Scheme (NIS), a Conservative spokesperson told ZDNet UK on Friday.

Many of the cuts would be in back-office public services, said the spokesperson, who added that there would not be direct public-sector job losses.

"These are not job losses — this is about not filling vacancies as they arise in the back office," said the spokesperson.

Ovum senior analyst said Sarah Burnett that IT contractors should be aware of the Conservative plans, and that potential loss of employment was a risk contractors should consider. However, little is known about the details of Tory plans at the moment, and the risk to IT contractors is dependent on a number of factors, she added. The Conservative Party did not respond to a request for comment on contract job losses.

The Tories said on Monday that they had asked ex-Logica head Dr Martin Read and civil servant Sir Peter Gershon for advice on how to improve public-sector efficiency. Read and Gershon identified £12bn of public money that could be saved, said shadow chancellor George Osborne in a statement.

"Clearly, part of the £12bn of savings will be found in the health service," said Osborne. "We have made explicit commitments to protect these budgets, and so the money saved will be reinvested onto the frontline."

The Conservatives have repeatedly said that they plan to break up large government IT projects such as NPfIT into smaller pieces.

The major contractors for NPfIT include CSC and BT, while the project is administered by Connecting for Health (CfH). CSC and CfH declined to comment on Friday, while BT did not respond to a request for comment.

There will have to be public-sector cuts no matter which political party comes to power, but in the short term, existing IT suppliers for NPfIT are unlikely to be affected, Ovum senior analyst Cornelia Wels-Maug said on Friday.

"There are lots of existing contracts with suppliers, and the new government might be shy to break those contracts or renegotiate them," said Wels-Maug. "A fair part of what is running will keep running."

She added that there may be changes when contracts come up for renegotiation, although she pointed out that large suppliers such as Fujitsu had already decided to withdraw from NPfIT due to lack of profitability.

The Conservatives have repeatedly promised to scrap the scheme. Ovum analyst Burnett said technology suppliers, which include IBM and CSC, could lose money should the NIS be scrapped.

"[The suppliers] will have committed resources up to a deadline according to their contractual terms, and will have to look at exit strategies," said Burnett. "It's definitely a big threat for them."

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