by Andrea Di Maio | April 25, 2012 | Comments Off on UK Government’s Aggressive Targets for IT Cost Reduction: Are They Achievable and Desirable?
Yesterday I was one of the keynote speakers at the Microsoft’s Government Solutions Forum in London. The speaker before was Liam Maxwell, recently appointed as Deputy Government CIO and already Director of ICT Futures.
Liam gave a compelling speech about the current ICT strategy for the UK government, stressing how radical they need to be to achieve considerable cost reductions. He mentioned that the current spending is around 26 billion pounds and they should aim at something around 8 billion pounds. Although he did not commit to a particular timeframe, he clearly indicated that this would take place over time as individual contracts with suppliers (be they product licenses, or other kinds of IT services) come to an end and get either renegotiated or retendered or just not renewed. The weapons they plan to use are a combination of procurement consolidation, open standards, open source (although he made clear there won’t be any preferential policy), engagement of smaller suppliers, as well as the CloudStore (previously known as G-Cloud).
The UK government has been on a long journey toward greater IT efficiency for a long time, but – as Liam observed – savings have been modest at best, and so have been impacts on productivity, unlike in the commercial sector. Therefore being more aggressive and radical is in order.
The approach seems to be strongly based on centralizing control in fewer hands: Cabinet Office or CIOs from large departments being part of the Delivery Board. This is in line with what others, like Canada, are doing, although slightly more nuanced.
However there are reasons for concern that I expressed in a previous post: is greater control the best way forward or should governments explore choice as a complementary means to reduce costs? For sure there are areas where sharing and centralizing is the best way to go, but in other areas the availability of inexpensive consumer technology as well as the increasing commoditization of IT services (and in particular application service) offering raises doubts about whether the best buyer of such services is somebody at the center, or people who are closer to the specific problem they are trying to solve.
But, more importantly, for how attractive a huge reduction of government IT spending might be, is an order of magnitude realistic? For how suboptimal contracts and for how inefficient the use of IT resources might be, I have a hard time at believing that there is such a vast room for improvement without compromising the sustainability of government services. Of course if one looks at the broader picture, with concepts like the Big Society and Open Public Services, which assume increased engagement of the private and voluntary sector in government service delivery, then the cost reduction takes a different meaning: but still it is predicated on the yet-unproven assumption that a market of mixed services will develop and thrive.
Actually this is also one of the fallacies of open government, another theme that is very close to the Cabinet Office and its Minister’s heart: pushing open data out will create value for citizens. In fact, in his speech Liam mentioned quite a few times the concept of citizen engagement and the whole idea that services need to be built to serve citizens: this is absolutely correct, but haven’t we heard the same story more than 10 years ago, in the early days of e-government and then joined-up government? And, more importantly, after quite a few years of open government and open data, aren’t we still asking questions about its real value?
The National Audit Office gave a great contribution, as well as wake up calls, on both shared services and open data. Let’s hope the Cabinet Office listens, and focus some of its attention on how individual government employees and not necessarily citizens themselves can be the critical resource to increase productivity and innovation. Because what matters is not how much less government spends on IT, but how much less government costs as a whole.
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