ICT cuts in doubt after G-Cloud goes critical

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A government pledge to cut £1.4bn off its computing costs has lost its footing after a key scheme behind the target was fingered over its near failure.

The Cabinet Office G-Cloud scheme was meant to be the main instrument of its cost-cutting plan, aside from a temporary budget freeze it called the ICT Moratorium.

The Major Projects Authority (MPA), part of the Cabinet Office, put G-Cloud on "amber/red" notice last week when it published its first annual review of major government projects.

It gave Cabinet Office official warning that it must take "urgent action" because G-Cloud had major problems and a good chance of failure.

Cabinet Office underpinned G-Cloud with a £100m procurement scheme last year, and told government departments they should use it to buy their IT goods and services.

But departments have shown so little interest in it that Cabinet Office has declared that it will try and force them.

"[We] will be working with departments and the Cabinet Office spending controls team to enforce use of the CloudStore across central government," said the Cabinet Office response to the amber/red warning in the MPA review on Thursday. CloudStore is the website sales front for the G-Cloud scheme.

Doubt

Chris Pennell, who has been watching G-Cloud as principle analyst at research firm Kable, said it was not certain if Cabinet Office had any power to mandate government departments to use it. Cabinet Office had also mandated that departments use open source software. They had simply not complied.

Cabinet Office had pledged G-Cloud would save £40m in the year to April 2013, by channelling departmental IT spend to off-site computing providers and consequently allowing them to decommission their own computer systems - a plan known as data-centre consolidation.

But according to a Kable anlysis of G-Cloud numbers, departments had spent only £18.2m through the G-Cloud in the year to April 2013. Any savings would have amounted to only a fraction of the total spend of around £20m - and therefore but a fraction of the savings target of around £20m.

Kable reported that G-Cloud booked most of its business between January and April, amounting to £11m with just a handful of providers.

Pennell reckoned G-Cloud's fortunes may only improve when departments' £multi-billion ICT contracts came up for renewal next year. Recent sales might be a sign of a healthier trajectory.

Uncertainty

The Cabinet Office did not answer a Computer Weekly request for information about G-Cloud's sales targets, and by how much the £18m bookings fell short of them.

CloudStore and data-centre consolidation were meant to cut £100m off the cost of government IT this year, according to the Cabinet Office's ICT Strategy Implementation Plan in 2011.

The Cabinet Office said in its response to the MPA report that G-Cloud sales growth had been "exponential" in the last couple of months.

It blamed the culture of the large departments for G-Cloud's failure. It did not say what this culture was or how it stood in the way of its G-Cloud. But it may be assumed that it meant the practice of procuring ICT under long-term £multi-billion contracts with large systems integrators.

It said it would use marketing and advertising to make G-Cloud more attractive to departments. But the scheme itself had been short of resources.

The ICT moratorium, a freeze on new ICT projects, would save £380m.

Another Cabinet Office target to cut £1.2bn through hard-ball negotiations with systems integrators disintegrated under scrutiny earlier this year.

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