Central govt cut IT costs by £800m last year – NAO
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National Audit Office figures show that central government departments reduced their total IT spending by around 10% last year
Central government departments cut their IT spending by almost £800 million, or roughly 10%, between 2009-10 and 2010-11, according to a report from the National Audit Office.
The majority of savings came from cancelling major IT projects such as the national identity card scheme. Axing projects allowed the government to cut capital IT expenditure by 35%, from £4.1 billion in 2009-10 to £3.6 billion last year.
This was the largest saving in any area of central government spending, including land, property, transport and the military. The NAO warned, though, that the government was unlikely to repeat this reduction as most avoidable major IT projects have now been cut.
"It is unlikely that IT capital spending will remain at this lower level... if investment in IT is necessary to allow departments to deliver more efficient services while reducing staff and… delivering services online," the NAO report said.
The NAO calculated that the government also cut 'Other IT' costs by 6% to £4.0 billion, primarily by renegotiating cross-government contracts.
Amyas Morse, the head of the NAO, noted the government's success in cutting costs but warned that short term measures are not enough.
"Most departments will need to cut their spending by much more over the next four years," he said. "This will not be possible without their recognising that short-term measures are not enough and that fundamental changes are needed [to] implement new ways of delivering their objectives, with a permanently lower cost base."
In its revised ICT strategy, published last year, the government said that it plans to save £1.4 billion over four years by reducing waste and project failure. It hopes to achieve this with techniques including Agile software development, open source software adoption, buying from small and medium-sized suppliers and the use of cloud computing.
