The government has signed a new contract with Capgemini, one of its biggest IT services suppliers, which will lead to more than £200 million in savings, Cabinet Office minister Francis Maude has revealed.

The deal also promises flexibility, allowing HMRC to run more open competitions for IT suppliers.

Capgemini was among the 19 suppliers that signed a memorandum of understanding (MoU) with the government in 2010 to initiate a 'single-client' approach to IT procurement, as part of cost-cutting initiatives.

Speaking at Procurex, the annual procurement conference in Birmingham, Maude said: "We are pleased we have been able to work with Capgemini to save the taxpayer money and support SMEs, and will continue to work with other suppliers in a similar way."

The savings are related to HM Revenue and Customs' (HMRC) Aspire contract, under which Capgemini provides desktops, laptops, and tax and credit systems such as VAT filing. Capgemini has been confirmed as HMRC's system and service integrator through to 2017.

Under the new deal, HMRC will pay less per unit of IT services supplied, and pricing of the IT services has been made more transparent.

The department will also have more control to run open competitions for its IT needs. It expects this will create more opportunities for SME suppliers to get involved. Currently more than 150 SMEs form part of the approximately 360 partners that work to deliver the Aspire contract.

In addition, Whitehall said that the contract negotiations have given Capgemini the opportunity to align its services more closely with the government's ICT strategy.

"The experience gained by HMRC from this deal will now be shared across government to help other departments benefit in their own supplier negotiations," a Cabinet Office spokesperson said.

Meanwhile, Maude also told the conference that central government expects to reduce its overall spend on goods and services by £8 billion in the two years between 2009/10 and 2011/12.

"Last year's contract renegotiations saved £800 million across suppliers and a further £140 million will be delivered this year - overall we will spend £8 billion less than two years ago on goods and services, but more of this will be with smaller firms," he said.