A vote for Scottish independence would cost the country billions of pounds in lost IT infrastructure, but open up opportunities for native IT suppliers, it is claimed.
With the Yes and No camps closely tied ahead of this week’s vote on whether Scotland remains a part of the UK Kable analyst Jessica Figueras said the effects of a Yes vote would be "profound", requiring billions of pounds to be spent on IT projects that would prove to be huge undertakings for the newly-independent country.
"Essentially we are talking about a number of separate ICT projects, each on the scale of Universal Credit," she said. "The Scottish government would also need to build its own ICT capacity right across the board – skilled ICT people, shared services, procurement specialists and the like."
There would be a long transition period while Scotland set these up, she added, in which the UK may have to step in to help.
"In the interim, getting HMRC and DWP’s systems to deal separately with Scottish citizens would require major work – for example, PAYE is not currently set up to deal with people on the basis of where they live," she said.
"The ICT costs of separation would run into the billions of pounds, with costs on both sides of the border."
Georgina O’Toole, analyst at TechMarketView said only a "handful of low profile organisations" such as the Civil Aviation Authority that would continue to share services with the UK.
She said the transition period would continue until 2018. But the process is more tangled than a relatively simple matter of setting up new IT systems.
"Scotland would have to set up numerous new organisations, systems and processes (which would clearly require the associated ICT)," O’Toole said. "The approach would necessarily differ depending on the location of existing assets or networks. For example, services such as tax credits and the welfare system, HMRC and DWP, all have assets or networks in Scotland."
Kable’s Figueras added that existing Scottish agencies working in conjunction with UK counterparts would suddenly find themselves bereft of the necessary technology and know-how.
"Although there are DWP staff in Scotland, there is no current organisation that could assume responsibility for Scottish benefits. And whilst Revenue Scotland does exist (it was set up to administer the taxes that are already devolved), it would need to be scaled up massively with some very significant new IT systems development in order to take responsibility for the full range of taxes," she said.
Where other services are based entirely outside of Scotland, the two Governments may have to decide how to share aspects of them by negotiating – a potentially long and prickly process.
O’Toole gave examples of new post-independence arrangements including Scotland deploying its own version of HMRC, a new welfare system based on Scottish needs and negotiation with Britain to secure the resources to support Scottish defence requirements.
You can throw in a new Passport Office, shipping register and driving services on top of that, too.
O’Toole said the Yes campaign believes the new systems would be simpler and would cost less to administer than the current arrangements, however.
She added that IT suppliers could benefit from all the tech projects.
"It’s clear that if the ‘yes’ vote wins, there will be significant opportunities for suppliers north of the border, as the Scottish Government puts in place its own systems and processes to deliver services currently delivered by Whitehall," she said.
