At least 60% of government bodies are paying specialist companies to dispose of their unwanted information and communication technology (ICT) equipment, rather than taking steps to sell their ICT assets while they are still worth something, the National Audit Office has warned.

The NAO said that very few public sector bodies were realising best value from their ICT equipment because most are using equipment until it has no resale value – for five years on average – and then disposing of it in relatively uneconomic ways.

It estimates that if public sector organisations reduced the age at which they disposed of end-of-life ICT equipment from five to three years, in line with current best commercial practice, this would increase the financial return from resale by around £70m a year.

And in its report, published today, it said that such a move would lead to higher procurement costs for ICT in the public sector but this was very likely to be offset by reduced maintenance costs and increased staff productivity.

“In particular, the advice of our professionals advisors and a review of literature indicates that operating cost savings in excess of 40% can be achieved through following best ICT equipment management practices which include faster refresh periods,” said the NAO.

It said no definite figure could be put to these savings but the scale of the public sector’s ICT hardware estate meant that potential savings could run to many hundreds of millions of pounds a year.

“It is clear that government needs to understand better the trade-offs between securing better immediate financial value and the wider environmental costs and benefits associated with the disposal of ICT equipment,” said NAO chief Sir John Bourn.

Andy Cox, a managing consulant at IT consultancy Morse, said the report was timely, since managing the lifecycle of IT assets was something the private sector had got a lot better at in recent years.

“The public sector should be following its lead. Local and national government could potentially make millions of pounds of savings by undertaking analysis to understand the optimal time to retire old assets and buy new ones.

"It might sound surprising, but once you consider maintenance, management and energy costs, its often cheaper and more environmentally friendly to retire a product after three or four years rather than five or six years. Not only that, but by taking advantage of vendor trade-in programmes you can also get cash back for your old equipment.”

The NAO report also warned about the need for better practices in central and local government around data wiping.

It said 70% of central government departments did not check that data had been wiped from ICT equipment being disposed of, exposing them to potential security breaches.