Whitehall IT running costs creep up again to £4.6bn

So much for Moore's Law: Costs of keeping lights on go up in Whitehall

Despite government plans to cut expensive contracts, IT running costs across Whitehall crept up by 7 per cent year-on-year to £4.6bn in 2014/15, according to a spend analysis by The Register.

The findings are based on official government figures from eight of the largest Whitehall departments.

The Ministry of Defence – which spends the largest amount on IT – was the only department to cut costs significantly, down by 4 per cent to £1.7bn in 2014/15.

Most of the IT savings the government has made to date have been due to the Cabinet Office's spend control process, applied to new IT spend rather than ongoing costs from existing contracts.

Last week the Cabinet Office claimed the Government Digital Service saved £390m in 2014/15 through controls, cancelled projects and "ICT Strategy savings".

Meanwhile, £7m had been saved by the GDS working with departments, as part of their "digital transformation" programme.

The increase in costs demonstrated the scale of the task the government faces in trying to reduce IT spend.

The government had expected digital services to reduce staff costs by processing transactions efficiently and introducing more customer self-service, said the The National Audit Office in its June report. However, the body said there is "little evidence" that departments are making the expected savings from digital services.

Alan Mather, former government IT chief, has previously written that many billions of pounds remain locked in transaction contracts, where most legacy applications remain. In a comprehensive analysis addressing the difficulty in transforming government IT, he notes the challenge of connecting back-end systems with the more "agile" front end created by the GDS.

He said: "Tackling transaction is both fundamentally necessary and incredibly hard, though most of that isn’t about the shiny front end – it’s about the policy, the process and the integration with existing back-end systems (which absorb some 65 per cent of the £12-16bn spent per year on [cross public sector] IT in government). There is a sense of 'Abandon Hope All Ye Who Enter Here'.”

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