Councils move from e-government to efficiency savings

The past year could be a turning point for public sector IT. At least that is what government CIO Ian Watmore hopes.

The past year could be a turning point for public sector IT. At least that is what government CIO Ian Watmore hopes. At the start of November he announced his long-awaited strategy document, Transformational Government - Enabled by Technology. He went on to say public sector IT was "on the verge of an era of delivery".

Delivery in 2005 was the usual mix of high-profile problems - particularly at the Department for Work and Pensions, Child Support Agency and Inland Revenue - combined with success in smaller projects that was often overshadowed by the controversy surrounding major failures.

For local authorities, it was the year when work to meet the prime minister's 2005 e-government targets was completed and when some turned to external suppliers to launch business transformation projects for the next wave of e-government.

Local e-government minister Phil Hope announced in February that councils must find cost savings of £1.2bn through greater use of e-services. Hope said authorities had to begin by saving £121m in 2004-2005. In the 2007-2008 financial year, he expects them to save £400m.

Birmingham City Council signed the biggest local government IT contract of 2005 in a joint venture with Capita worth a minimum of £420m over 10 years. The rewards are likely be much larger for Capita if its joint venture with the council is awarded most of Birmingham's business transformation projects over the life of the contract.

If the council's predicted cost savings of £1bn are realised, it will ensure that Birmingham City Council meets the government's efficiency targets.

The risks in major joint ventures that go wrong were illustrated in August, when Bedfordshire County Council paid supplier HBS £7.7m to buy itself out of a 12-year contract.

In another high-profile outsourcing contract, Swansea Council spent all year negotiating a deal with Capgemini. The council's IT staff went on strike for two months in 2004 when they learned that their jobs would be outsourced after reading an advert in a European journal.


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