The UK economy – currently rated as around fifth largest in the world – has a high public sector component. Total public spending is expected to be half a trillion pounds (£552 billion) for the coming year, around £9,200 for every man, woman and child in the UK. That figure is set to rise to £583bn in 2007-08 and £610bn in 2008-09.

But even as the Exchequer pumps more money into the national purse – public sector employment accounts for six million people in the UK workforce – the government says it is curbing the spending plans of many parts of central administration. In the 2005 Budget, Chancellor Gordon Brown revealed that his headline-grabbing commitment of extra investment in schools would be at the cost of a zero increase in spending for the Home Office over the three years from 2007-08, and that spending would be cut by five per cent a year at the major departments of the Treasury, Revenue and Customs, the Department for Work & Pensions and the Cabinet Office.

The world of Gershon

Welcome to the world not just of Gershon, but of IT as a key factor in making better use of New Labour’s ongoing investment. ‘Gershon’ of course refers to the 2004 efficiency review by Sir Peter Gershon, which has led to a project to cut some 70,000 jobs in Whitehall over the next couple of years, as well as in local government.

The overall aim is a cut in operating expenses in the public sector of some £21.5bn and annual improvement in running costs thereafter. This is being carried out across the sector by initiatives such as a move to shared service centres and greater use of e-procurement, but almost anything that cuts backoffice staff can be justified by citing the ‘g’ word at the moment.

The latest word – t-government

Indeed, welcome also to the world of not just ‘g’ but ‘t’ government – forget the ‘e’. Last November the government claimed in effect that e (electronic) government was done – in the sense of providing electronic access to services for the public – and that the next step was t-government, where transformation of public service delivery by IT was the aim.

As well as the cost savings, the then head of the Cabinet Office’s e-government unit Ian Watmore told Socitm, the local central government manager’s body, that central government IT and IT services spend now stands at £14bn. “But around 75 per cent of that is spent on legacy systems and keeping the lights on stuff,” he said. “Best practice suggests that should be more in the 60 per cent range and if we can do that, that would be £1.5bn released back to service improvement and delivery.”

If the government can deliver on all these savings through an IT approach, surely the country and the industry would benefit. But there is, alas, a big gap between the aims of policy reviews and real life. ‘Low’ lights of the year on this front include the troubled Child Support Agency system, which was due to be operational in 2003 but has so many problems it will take supplier EDS until the end of next year to fix it. And a big chunk – 15 per cent – of that Gershon £21.5bn goal depends on big government ICT projects and not much evidence seems to be available that UK plc is getting any better at making those projects deliver.

"The overall aim is a cut in operating expenses in the public sector of some £21.5bn and annual improvement in running costs thereafter"

Indeed the National Audit Office has warned that this reliance makes the whole Gershon idea “high risk”. Meanwhile the £6.2bn NHS National Programme for IT – the world’s largest civilian computer project – rumbles on, still attracting concerns that its complex multi-sourced approach and ambitious programme will not deliver. Supplier Accenture was a surprise public casualty of such issues, which NHS Connecting for Health czar Richard Granger habitually says are the inventions of a hostile press, when it announced a 67 per cent drop in annual profits due to problems with the 10-year electronic patient record system it is working on for the programme.

Other concerns surfaced this year around patient information security. It remains to be seen how much, and by when, this major public sector IT project will actually deliver, though most observers agree if it makes its targets the benefits for NHS users could be immense.