Chancellor George Osbourne has announced that HM Revenue & Customs will need to find 15% in savings, and technology will play a significant part in the process.
As part of the Comprehensive Spending Review announced today, Osbourne said the reduction in spending will be generated through more efficiency in systems and better IT contracting.
Sources close to the department told Computer Weekly that while the vast majority of HMRC's IT is outsourced, it retains enterprise architecture, security and commercial and financial controls.
As in many departments, HMRC retains systems integration and programme management functions. "There still remains a significant duplication of effort in design and service management between the retained and outsourced functions," said the source.
Mark Hall, director of IT at HMRC told delegates at the 360º IT conference in London last month, "It does not matter who you give the services to, the IT department will still retain accountability." The government's IT strategy will involve sharing services across departments, he added.
"This is a significant task to undertake. But organisations like HMRC and DWP are committed to doing this. We are in a situation where it is a no-brainer going forward. But it will take time and sequencing. The spending review will help the sequencing and achievement of that strategy," Hall said.