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April 21, 2009

Government review calls for £15 billion savings

Shared services and IT spending reviews to save £7.2 billion

By CBR Staff Writer

A year-long appraisal of operational spending in the UK public sector has found scope for £15 billion of efficiency savings in back office operations and IT, collaborative procurement, and asset management and sales.

In a review part led by former Logica chief Dr Martin Read, savings of £4 billion a year have been ear-marked through shared-services and back-office operations efficiency. 

Another £3.2 billion of savings a year are to come from reductions in IT spending.

He also recommends improvements be made to management information, more use of benchmarking, and better governance of IT-enabled change programmes to achieve the targeted cuts. 

Read has also called for publication of regular data on costs across the public sector, suggesting progress on meeting the efficiency targets mapped out following the Gershon report had been too slow.

In a report published today on its Operational Efficiency Programme, the government advisors concluded, “The private sector never stops seeking greater efficiency in the ways that it purchases and provides services, and neither should Government.”

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The report has triggered a string of responses from industry chiefs. Dave Baldwin, MD for Getronics said, “Government needs to embrace the opportunity to work with delivery partners outside its traditional comfort zone. A procurement process that is too long and too costly needs to change to suit its purpose.”

Simon Wayne, MD at Parity’s solutions division added, “Another area where the government can cut costs is through shared services schemes which centralise back-office functions and consolidate similar activities in one location.”

He said that introducing standardised systems based on proven models will help local and central government do more with less. 

“The consolidation of government bodies’ physical estates has been a key focus in previous budgets, and IT plays a key role in making the move successful,” Steve Ash, government sales director at Citrix said. 

Virtualisation can be really useful here, removing layers of complexity and easing the management of applications and hardware by centralising both control and maintenance.

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