Government efforts to reduce spend ‘starting to work’, says NAO

23 Jan 2013

A new report finds that reforms are starting to take effect, but while poor data collection across the public sector makes progress hard to measure, there is clearly much work still to be done.

UK Government initiatives to cut IT spending are starting to work, says a report released yesterday by the National Audit Office (NAO). In 2011/12, it finds, three government reform initiatives resulted in savings of £316 million. These were the ICT spend control initiative, the shared IT infrastructure programme, and the centralised IT procurement programme. Overall, £6.9 billion was spent on IT in 2011/12, the report says.

This programme of reforms - along with two others, managing suppliers as a single customer and making government contracts more open to small and medium-sized suppliers - was kick-started in March 2011, with the publication of a new government ICT strategy. The Committee of Public Accounts welcomed this new strategy in June 2011 but called it “very ambitious” - which is why the National Audit Office has taken to monitor the progress of reforms.

Based on progress to date, the NAO now believes that the government is likely to “meet, if not exceed” its ICT savings target for the 2012/13 year ending March 2013. This target, set in October 2011, stands at £440 million - but by October 2012, the government had already saved £410 million over the first six months of the fiscal year, subject to audit, and expected to save a further £200 million by the end of March 2013.

“The appointment by the Cabinet Office of commercial experts has helped departments to claw money back, renegotiate contracts before they expire and, overall, spend less on ICT than they otherwise would have done,” says the NAO in its report.

The news wasn’t all good, however. Poor data meant that the NAO was unable to validate the £348 million of savings claimed by the Cabinet Office for 2011/12. Only 89 percent of the claimed savings could be verified, it notes. Plus, the NAO was only able to assess data from 17 central government departments and 69 “arms-length bodies” and uses the report to urge the Government Procurement Service to renew its efforts to increase the amount of data that can be collected across the public sector.

In addition, the NAO found vendors it spoke to in 2012 were less positive about their relationship with the government than they were in 2011, as they feel cutting costs is now more important than transforming services. That said, some ICT suppliers have taken advantage of wasteful government IT procurement for years and were bound to complain when it came to an end.

“We are pleased that the NAO recognises that our efforts to cut the cost of government ICT are working,” reads a Cabinet Office statement. “But because ICT spending was so wasteful in the past, we also know that there is still a long way to go. We must accelerate the pace of change.”