How many UK Public Sector IT suppliers will survive the cuts?

What do you call an industry which does not plan for the inevitable? Like Y2K the cuts in ICT spend announced yesterday were inevitable. What was not inevitable was the rush of buyers and suppliers into a final round of big-bang deals that were bad value for taxpayers and shareholders alike and will have to be unscrambled.  Rather than bemoan the reasons why ICT turned from White Knight into Whipping Boy I would would prefer to ask “How many suppliers have the wit and will to help turn a potentially terminal crisis for their UK public sector operations into an uprecedented opportunity for mutually beneficial change?”  



Is there the will to work with customers and competitors on bottom-up incremental change programmes that will profitably deliver service improvements in parallel with cost savings, on positive cash flow? Can users and suppliers mobilise the collective imaginations of their front-line staff (perhaps supported by £19,500 consultancy exercises) to identify short-order pilot projects under the OJEU limit (currently about £140,000) that have the potential to not only pay back inside the quarter but grow, incrementally on positive cash flow?

“Positive cash flow” is the key: whether that is achieved because success generates ever greater savings from within fixed budgets, or because recipients will pay for better service (as the middle classes do when they pay £2.50 more to renew their Driving License on-line rather than queue in the Post Office).

But how many public services can get more funding by providing better service, as opposed to running out of budget faster. Hence my scepticism that Cloud Computing, based on fees per transaction, is the “answer” – other than as a way of re-organising and rationalising the duplicated data centres of government around shared service delivery contracts.   

At this point I recommend that those who wish to survive the next round of slaughter should read the Audit Commission and the National Audit Office “Review of Collaborative Procurement across the Public Sector“.

The Information Society Alliance  Public Service Delivery Group is using this as the start point for an exercise to identify and publicise good practice in planning and procuring the shared network services that will be central to “delivering more for less” when the current round of “stop the bleeding” reviews comes to an end.

Equally important, however, is the need to rationalise and reform the procurement of security services – so that ill-informed claims as to what is mandatory, let alone good practice, do not continue to get in the way of adequate practice. That, in turn, requires action on security skills, quality as well as quantity.      

Time is not on our side. We have months, not years, to achieve results and get business flowing again. Longer than that and the damage to the UK supply side could be terminal – as major suppliers axe government account teams and lose what is left of their understanding of what is different about the public sector – instead of learning how to adjust to, and profit from, changes that are long overdue.

I Iament, in advance, the fate of those doomed to fight rearguard actions against change, hoping to be able to live on their redundancy payments when these fail. Basic beancounting says that it may be better to leave now, while there is still the money to pay the statutory minimum. much better to recongise the inevitability of change and lessen the birth pangs of the new world.