Thought for the day: Gordon Brown's other budget

Colin Beveridge hopes the chancellor did his sums before opting for Civil Service cost cuts

Colin Beveridge  

Has the chancellor taken the cost of transition into account in his decision to merge the Inland Revenue with Customs & Excise? Colin Beveridge hopes so.




Gordon Brown’s 2004 Budget statement was very good news for IT consultancies and freelancers because it holds out the very real prospect of immediate long-term assignments, in support of the merger between the Inland Revenue and Customs & Excise.

I must say that to the man in the street this initiative does seem like an immensely sensible move, in fact almost such a “no-brainer” business decision that we must wonder why it hasn’t happened before.

However, both of these organisations have huge dependencies on data processing and burgeoning technology infrastructures that will have to be consolidated quite quickly if the chancellor is to realise his cost-cutting ambitions for the Civil Service.

Of course, this wasn’t a spur-of-the moment decision to amalgamate two of the principal government departments. The announcement apparently follows a substantial review of their operations so one would hope that the planning is already at an advanced stage.

But  the merger isn’t going to be cheap. There will be a significant cost of change, and that cost may seriously dissipate some of the desired cost savings, at least in the short to medium term.

As a taxpayer I hope that this cost of change has been properly assessed and factored into the proposal because, in my professional experience, it is frequently overlooked or considerably understated. In fact, I would go so far as to say that the cost of change is more often completely absent from any cost/ benefit analysis.

For some reason, far too many of us seem to gloss over this important issue, rather than recognising it as an integral part of every programme. And, of course, the bigger the programme, the bigger the risk we run by not counting the cost of change properly.

We must all trust and hope, therefore, that such a prudent chancellor of the exchequer and his advisors have taken into consideration, not only the existing operational costs of the Revenue and the Excise but also the double running costs of the emergent consolidated body as it progressively moves into position behind its predecessors.

We will still have to feed both of our existing cost-hungry elephants until the new, slimmed-down baby elephant is ready to take their place in the government menagerie.

From an IT perspective, the cost of transition is likely to be enormous and will probably require the injection of large numbers of consultants to facilitate the integration in a timely manner unless, of course, there are already lots of government IT people sitting around just waiting for a call to action.

But I don’t suppose for a minute that there is such a pool of talent on the bench, so it will be extremely interesting to see how the Revenue and Excise IT merger programme is resourced and how many IT contractors will relish the prospect of disguised employment with the Inland Revenue while IR35 remains on the statute books.

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Colin Beveridge is an independent consultant and leading commentator on technology management issues. He can be contacted at [email protected]

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