UK public sector could save £20B by swerving mega-projects and more, claims chief auditor

Spending watchdog slams reliance on outdated systems and poor governance

The UK’s chief auditor has claimed the government could save at least £20 billion by modernizing IT systems and other measures.

Along with modernizing legacy systems and improving technology procurement, Gareth Davies, head of the National Audit Office, said tackling fraud and getting a grip on failing mega-projects would also help liberate cash.

Speaking to the Financial Times, he said more than £7 billion ($8.84 billion) of savings could come from overhauling public procurement, £10 billion ($12.62 billion) from clamping down on fraud and £6 billion ($7.57 billion) from lashing tax evasion and avoidance.

But legacy IT systems were also in his sights. Better use of IT is vital to improving public services, said Davies. Some government departments were using 30- and 40-year-old computer systems. For example, in 2021, the NAO found that a computer system from the 1980s was one of the causes of a scandal which led to more than £1 billion ($1.26 billion) of state pensions not being paid.

He also encouraged the government to take risks with IT project, even if the Post Office's Horizon scandal highlighted the dangers of new projects.

"Our view, as auditors, is that those are risks that need to be embraced rather than [government] being so risk-averse that you fail to take advantage of the big opportunities that are coming," he told the broadsheet.

Davies argued that failures, such as Horizon and the now-abandoned £10 billion National Programme for IT in the NHS, showed targeted, smaller projects could reach their goal faster.

"The phrase used in the IT industry is 'dolphins not whales.' So manageable projects compared to gigantic, overambitious attempts to change the whole world with one IT system," he said.

In December 2022, the NAO reported legacy services were becoming increasingly expensive to maintain. It said a Cabinet Office-commissioned report, "Organising for Digital Delivery," cited government analysis which indicated that nearly half of all technology expenditure across government in 2019 was dedicated to "keeping the lights on activity on outdated legacy systems."

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Despite Davies' claims, it's important to note that the government has been here before. In 2017, The Register revealed how the plans to overhaul £6 billion ($7.58 billion) in large IT contracts expiring within the next three years have fallen by the wayside. Insiders said the distraction of Brexit and a lack of will by the Government Digital Service under Kevin Cunnington's leadership were to blame for the watering down of the reform agenda. ®

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