Category Archives: recruitment freeze

Some success in cutting Whitehall costs

By Tony Collins

The coalition government, Cabinet Office, Treasury, departments and agencies have succeeded in cutting central government costs, according to a National Audit Office report published today.

The NAO found that “in particular, large reductions have been made in spending on consultants, temporary staff, property and information technology” in 2010-11.

Departments cut their spend on consultants by £645m in – a real-terms reduction of 37%, said the NAO which also identified “£537m reduced capital spending on IT-related items”.

Unlike some previous reports of the NAO that have questioned the credibility of officialdom’s claims of savings, the NAO’s latest report “Cost reduction in central government: summary of progress” found that the savings claimed by the Cabinet Office, Treasury and government were usually genuine.

Where departments have cut costs by cancelling IT projects or having contracts renegotiated – as opposed to simplifying and streamlining the way they work – the NAO was unsure whether the savings could be sustained.

Said the NAO

“Central government departments took effective action in 2010-11 to reduce costs and successfully managed within the reduced spending limits announced following the 2010 election.

“This resulted in a 2.3% real-terms reduction in spending within departments’ control, compared with 2009-10. Some £3.75bn or around half the reduction was in areas targeted by the Efficiency and Reform Group for cuts in back‑office and avoidable costs.”

Are IT cuts sustainable without a change in working practices?

The NAO said:

 “The fall of 35 per cent in IT capital spend is partly the result of decisions to permanently halt or reduce spending on specific projects, and partly the result of action to reduce the costs of IT products and services including through contract renegotiation.

“However, it is unlikely that IT capital spending will remain at this lower level in total, given the key role of IT and online services in increasing productivity.”

The NAO mentioned the actions of some departments by name.

–          The Home Office cut costs in part by “significant reductions in IT, estates and consultancy spending”.

– HM Revenue & Customs, the Department for Work and Pensions and the Ministry of Defence aimed to secure the bulk of cost reductions from within their organisations. HM Revenue & Customs has established comprehensive governance arrangements to reduce costs, with a central team and programme management infrastructure. The Department for Work and Pensions put in place a transformation programme board in May 2011 to oversee the redesign of its corporate centre and broader cultural change. “However, it cannot finalise plans beyond 2011-12 as they depend on the future business model after the introduction of Universal Credit,” said the NAO. The DWP’s finance team has provided ‘What the Future Holds’ updates and interactive briefings for staff.

– The NAO said it “identified strong leadership as a key factor in the success of the Foreign and Commonwealth Office’s cost reduction efforts”.

– The Centre for Environment, Fisheries and Aquaculture Services within the Department for Environment, Food and Rural Affairs “held sufficiently detailed information to be able to challenge its project managers to reduce costs without affecting services”. The NAO said the “resulting savings identified from some 200 projects made up 30 per cent of the Agency’s efforts to meet their efficiency savings target”.

In July 2011, the Cabinet Office’s Efficiency and Reform Group reported to the Public Accounts Committee that it had helped save some £3.75bn through various initiatives. “Our analysis of the audited accounts of the 17 main departments confirms that spending in the areas targeted was reduced on this scale”, said the NAO.


The NAO report shows that within some departments officials are cutting costs by simply reducing grants but some parts of central government are making an effort to do things differently.

We hope the coalition and Cabinet Office keep up the pressure for cost-cutting because, in IT alone, the potential savings are in the billions. The NAO report shows there has been a good start. We hope that the officials who are achieving lasting success will pass on their learning experiences to those who are struggling to make cuts sustainable.

NAO report Cost reduction in central government – a summary of progress

Where is the Government CIO?

By Tony Collins

Joe Harley, Government CIO

Joe Harley, the government CIO, is much respected inside and outside of government.

Amiable, straight-talking and influential, he could be the Government’s civil service ambassador for change.  Like his predecessor John Suffolk he could use conferences and public events to talk inspirationally about the dystopian costs of government IT and what to do about them. He could jolt the complacent into an awareness of their self-deceptions.

Why hasn’t he? If the Government CIO has much to say  is not for the public ear.  While there has been talk in recent weeks of how five corporations control GovIT, and how it can cost up to £50,000 to change a line of code, Harley has been silent.

Where does the Government CIO stand on the need for major reform of the machinery of government, on the sensible risks that could save billions?

Is the top man in Government IT inspiring his colleagues and officials in other departments to do things differently?

It’s true that Joe Harley has enough to do – perhaps too much – in his “other” day job as CIO and Director General of Corporate IT,  Department for Work and Pensions (DWP).

He is a leader of the programme that is helping to deliver Universal Credit. He chairs the public sector-wide CIO Council; and his trying to do more with a smaller budget will require all the skill and the experience he acquired as global CIO for ICI Paints and before that as BP’s IT Vice President for global applications, hosting and consultancy.

These responsibilities give Harley a chance to point to a new way, to confront unequivocally the costs of GovIT, to lead by example: by replacing gradually the long-term contracts and monolithlic suppliers of old; by listening to SMEs and employing them directly, and in more than a token capacity.

What has happened is the opposite. HP, Accenture, IBM and CapGemini are safe in his hands.

The DWP has recently awarded those suppliers new and conventionally-large, long-term contracts. Headlines in the past two months hint at how the DWP will, for years to come, dance to the tune of its large IT suppliers:

“DWP signs fifth large deal with HP”

“DWP awards Accenture seven year application services deal”

“DWP awards IT deals to IBM and Capgemini”

These deals could be seen as a protest against all that Francis Maude, Minister for the Cabinet Office, stands for.

In March Maude spoke of a need for big contracts to be broken down into “smaller, more flexible projects” which would “open up the market to SMEs and new providers”. Maude wants to end the oligopoly of big GovIT suppliers – but does he have an influence at the DWP?

Nobody is suggesting that Harley shows a hard fist at the negotiating table. But he should assert himself sufficiently in public to make us believe that his appointment as Government CIO was more than the filling of a vacuum.

He doesn’t need to lead by radiating charisma; but can you inspire from the shadows?  Billions is spent unnecessarily each year on not changing the government administration. So it’s time Harley advocated change.  He could be a standing reproach to the myth that senior civil servants do all in their power to obstruct change.

Deposing the muscular monoliths in the supplier community will require a consuming interest in innovation, courage (risk-taking) and a passion to cut costs. Harley has many strengths and qualities. Surely these are among them. But if they’re not manifest soon, some in government will wonder if the Government CIO has gone missing.


DWP awards 7-year deal worth up to £350m to Accenture

DWP signs fifth large deal with HP

DWP awards deals to IBM and Capgemini

DWP signs big contracts with IBM and Capgemini