A senior adviser to the Treasury has revealed that the
2009 budget will include plans for "significant" savings in the
£30bn the public sector spends each year on IT and back-office
administration.
The savings could offset some of the public money being spent on
support for struggling banks.
Martin Read, former Chief Executive of Logica and now an adviser
to the Treasury, gave a hint at a conference last week of what is
in Alistair Darling's budget this Spring, in IT and back-office
savings.
He is lead of the back-office and IT strand of the Treasury's
Operational Efficiency Programme, which aims to identify new
savings of billions of pounds.
He was speaking at the Government IT 09 conference at the Queen
Elizabeth Hall in Westminster.
He said that a review has identified "significant" savings from
the estimated annual spend of £16bn on IT and £18bn on back-office
administration.
"We will be reporting in the budget in 2009 and you will see
what the numbers are involved and also recommendations on how they
[the savings] will be achieved," said Read.
He said that the review team has a "high level of confidence
that significant savings are achievable". He did not reveal any
savings figure. "I cannot tell you what it is but do wait for the
budget and you will find out more."
UK taxpayers are paying more for IT and the back office than
European counterparts and may not be getting better value for the
extra spend, he said.
"The bottom line is that the UK is spending a lot more money per
capita than our European counterparts," he said.
The savings will be made through standardisation and
simplification. "It is good in one way to have devolution across
the public sector, but there is a cost penalty if the devolution is
left completely to its own devices. That cost penalty is a lack of
standardisation, simplification and sharing back-office operations
and IT."
Read's talk suggested there could be large new contracts for
shared services. But he also made it clear there would be no
rip-out-and-replace policy. He said, "It is about standardisation
and simplification of IT systems."
He added, "There is a lot of good stuff out there, but I am
convinced we could do a lot of things better."
Read is a non-executive director of British Airways and has been
on the boards of Asda and Boots.