Chancellor takes the axe to IT spending

George Osborne has not identified the IT projects that will be cut

As expected, the IT sector has been targeted today as part of the £6bn public spending cuts (PDF) announced by chancellor George Osborne designed to help cut the budget deficit.

Osborne said that £95m in savings could be found in IT spending across all departments, but details of exactly which projects are to be cut or scaled back have yet to be disclosed by the individual departments which have been given the autonomy to do so by the Treasury.

IT providers had been braced for the cuts for some time, and their fears were confirmed after the government's pledge last week to "take steps to open up government procurement and reduce costs ".

Trade association Intellect was quick to react to the cuts, urging the government not to be short-sighted in axing IT spend.

"Although change programmes and technology have an upfront cost, they can deliver significant long-term savings and efficiencies that could make an appreciable difference to the UK government's structural deficit over the medium to long term," said Intellect associate director Sureyya Cansoy.

"Freeing frontline staff from administrative burdens using technology can mean that resources are used more efficiently without harming the quality of the service."

David Clarke, chief executive of the BCS, The Chartered Institute for IT, similarly stressed the importance of IT in enabling efficiencies.

"IT underpins and enables the implementation of all government policies and programmes, and more effective use of IT is the only way the government has of reducing overall programme costs and improving efficiency," he said.

"It would be disappointing to see the critical role that IT and IT professi onals play in enabling the implementation of government efficiency savings and in developing the information society to slip down the government's agenda by the scrapping of some government IT projects."

Intellect's Cansoy added that the technology industry is keen to work with the government to help reduce the deficit, and urged a "do it once" approach which involves sharing services and reusing assets.

Ben Scott Knight, a director at business consultancy Concentra, warned that many savings programmes do not achieve their predicted targets owing to poor processes.

"The subject of spending cuts is likely to dominate the political landscape for a long time to come, so the government must put in place robust processes now to track benefits, calculate savings and avoid waste," he said.

"This could be the issue that makes or breaks this coalition government, so the pressure is on for them to get it right."

Farhan Mirza, principal of IT at management consultancy AT Kearney, cast doubt on the prudency of cutting IT spending.

"There are now going to be big concerns on the frontline of local authorities as cuts would be damaging to frontline IT," he said. "This isn't helping the improvement of frontline services, and cuts will only make this harder."

Mirza added that the cuts could have a damaging effect on IT capabilities in the UK. "The lack of IT funding in schools will inevitably dry up, which in turn will decrease the UK's IT skills in future," he said.

Education quango Becta, which promotes technology in learning, has been axed as part of the cuts. The organisation's chairman Graham Badman and chief executive Stephen Crowne maintained that Becta delivers valuable services to schools, colleges and children.

"Our procurement arrangements save the schools and colleges many times more than Becta costs to run. Our Home Access programme will give laptops and broadband to over 200,000 of the poorest children," they said.

"Our top priorities now are to make sure we have an orderly and fair process for staff, and that as far as possible schools, colleges and children continue to benefit from the savings and support that Becta has provided."