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October 27, 2010

Gartner first to say the unsayable: the CSR means IT-based services will also suffer

The spending cuts represent a clear risk to IT-based services, according to Gartner. Gary Flood examines what this could mean

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This month’s landmark UKHMG Comprehensive Spending Review – which is a conscious attempt to (as we used to say) "roll back the state" in the biggest set of public spending cuts since the 1970s – has generally so far been more or less welcomed by commentators in IT.

Politics aside, the general trend of the immediate ‘post match’ analysis has been that while this is tough love no doubt, there is room for manoeuvre, potential to innovate our way out of it and so on.

Now Gartner’s Euro man with the plan re all things e-gov, research director Massimiliano Claps, has let the feline out of the soft container by pointing out that there is clear risk, due to the depth of the cuts, that things will have to close. That’s IT-based things, mind – not ‘just’ the odd quango, or, judging from other news this week, the odd University, or multiple Arts and Humanities Departments. (Who needs them anyway? We’re so good at, er, manufacturing, sorry, the City. Right?)

Claps has picked through the numbers a bit now the dust has settled and worked out that a 20 to 30% cumulative real expense reductions in the 2010-2014 timeframe translate to an average annual cost reduction of 6 to 7% per year in central government Departments. At the local level, the cut is even higher, 7.1% (in times like these, my friend, a .1 matters) and of course the Town Hall IT teams have been given extra workload to boot.

"Our research shows that annual cost reductions below 10% are achievable through incremental IT process improvements, re-negotiation of IT contracts, and standardisation of hardware and software configurations," he writes.

Fine so far. Now the scary bit: "But since the cost-containment pressure [in the CSR] will remain constant for four years, some agencies will be pushed beyond the tipping point and will have to make more radical choices, such as whether to initiate government-wide IT consolidation, adopt cloud computing or ‘crowd-sourcing,’ or even shut down channels of communication to citizens, such as call centres or websites."

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This has to be balanced by the current orthodoxy that the more we can deliver over the Web, the Internet should be the primary delivery mechanism, cheaper transactions, yadda yadda. Claps is saying even that might not be enough, at least on paper and for some public sector bodies. They may be cut so much they have to nuke the online stuff, too.

Too stark a reading? Let’s talk at the end of November, when detailed Departmental breakdowns and budgets are due to be published and we will be able to see in detail what the order of the day is going to be.

Plainly, big state engines like the main government portal will be beefed up and I am sure we’ll all get used to doing a heck of a lot more voter registration, passport renewal, dog licence applying and what have you via such super-sites.

And yes, we’ll see more of the same at the local and presumably also cross-functional levels, e.g. local government, health, emergency services and education.

But not every promising bit of outreach will work and not all flowers will bloom. That’s fine – we’re all capitalists, we understand business reality.

But it may be in a few weeks time that we can start stopping the b.s. That suggests all the cuts mean is that the same services will be delivered online. They won’t. There will be less. There will be gaps. You can’t cloud your way out of everything.

Get your seat belts ready. It’s going to be a bumpy ride.

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