IT will feature heavily in tomorrow's Budget. While lobby groups are calling for technology funding to improve the UK’s competitiveness and create jobs, Whitehall departments face cuts in IT spending while also having to deliver greater efficiencies.

Chancellor Alistair Darling is expected to announce Whitehall spending cuts worth £15 billion in tomorrow's Budget, including savings from IT projects and back-office functions. Much of the Treasury’s sums have been based on the Operational Efficiency Programme review, by Martin Read former CEO at IT services provider Logica.

The review aims to streamline back-office functions to raise billions of pounds for the Government.

Read told the Financial Times that his review had found the public sector could save £3.2 billion on IT projects. A further £4 billion could be saved out of the estimated £18 billion cost of back-office functions over the next three years.

Some of these savings are already "pencilled in" according to Read. But he said, "There is huge variation in these costs across the public sector."

The review recommends publication of "regular, consistent, auditable and transparent data" on the costs across the public sector. Such scrutiny would put pressure on poorly performing departments to address costs. If they failed to act "we would expect those organisations spending considerably more than other people to have the money taken away from them".

Progress on shared services, one of the key recommendations laid out in the 2004 Gershon review on public sector efficiency, has been slow, but "we are in a different environment now," Read told the Financial Times.

But another report warns the UK economy risks losing £44 billion in revenue a year unless the Budget 2009 supports the development of new technologies.

The National Endowment for Science, Technology and the Arts ( Nesta ) has called on Chancellor Alistair Darling to set up a £1 billion fund to finance high-tech companies, filling the gap left by venture capital firms as a result of the financial crisis.

Nesta's "Attacking the Recession" report said the Government must invest in growth sectors such as green technology and digital media or lose its global dominance in these sectors.

"Failing to capture a share of the global market for clean technologies and environmental services similar to that which we enjoy in other important export markets, and falling behind with plans for renewable energy production, could lead to a loss of over £28 billion in revenues.

"Failing to step up to the digital challenge in our creative economy could cost the UK economy over £6 billion in value added per year by 2013."

In a policy statement released today, "Building Britain's Future - New Industry, New Jobs", business secretary Lord Mandelson (pictured) hinted at investment in UK's technology sector to create opportunities for Britain after the recession.

"Global competition is getting tougher and technological change is happening faster. We can't afford to stand back as other countries invest and skill-up to win in high-value markets and sectors," he said.