Budget 2010: Destination of IT spending cuts still vague

The consequences for future public sector IT spending remain far from clear after the Budget, with £250m of cuts promised but still left unexplained.

The consequences for future public sector IT spending remain far from clear after the Budget, with £250m of cuts promised but still left unexplained.

The government is looking to trim £500m from IT spending and some of that has already been detailed with £130m coming off the MoD, £100m out of the NHS National Programme for IT and £20m from the Home Office.

But that leaves £250m still unaccounted for and as Georgina O'Toole, research director at TechMarketView, said there had been no real explanation for where the remaining savings would be made.

There's no indication of where the other £250m will come from. In terms of the savings that have been identified, there's nothing radical. Indeed, many of the actions required to make the savings have already happened, such as the renegotiation of the Home Office main IT contract," she said.

The feeling that suppliers to the public sector will come under more pressure to deliver more for less is one that has been around pre-Budget but is strengthened after yesterday.

O'Toole said that the Chancellor Alistair Darling had indicated that front-line services would be protected but the pressure to sweat assets would continue in other parts of the public sector.

On the whole, it appears most of savings will be made by tightening up on the way departments and agencies work with existing suppliers i.e. getting 'more for less' or in some cases 'less for less', or by the scaling back of programme objectives, as opposed to radical cancellations of major programmes...at least for the next couple of years," she added.

In a budget designed to help Labour remain in power after the election the Chancellor spoke of an improving economy and pledged to do more to help SMEs get greater access to credit.

For further budget coverage:

Budget 2010: Labour would not rush public sector cuts

Budget 2010: Economy set to grow through 2010

Budget 2010: Business confidence remains fragile

Budget 2010: UK economy coming out of recession



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