The CIOs transforming government IT
01/09/2007
Analysis: And the tech challenges facing the public sector…

By Andy McCue Published 27 June 2007

The Transformational Government report and Varney review have once again thrust IT up the government agenda, from big modernisation programmes such as NHS IT to the push for shared services. Andy McCue looks at the CIOs in both central and local government who are playing a key role in delivering a joined-up public sector IT strategy.

The CIO has never been more important to the public sector - in both local and central government and beyond - due to high-profile, multi-billion pound programmes such as NHS IT and ID cards, an efficiency agenda putting continued pressure on cutting operating costs and targets to improve customer service.

The Cabinet Office's Transformational Government progress report earlier this year revealed the public sector spent £12.4bn - £3.3bn of that in local government - on IT during the financial year 2005/2006. That figure also excludes £1.1bn spent on the NHS Connecting for Health programme.

The biggest spenders were the NHS, the Department for Work and Pensions, HM Revenue and Customs and the Ministry of Defence.

Eric Woods, government practice director at analyst Ovum, said: "The overall forecast is for double-digit growth over the next five years but that is fuelled by the big infrastructure projects. The caveat is that behind those big deals the market is getting much tighter - generally a much lower level of growth or flat."

Tying all this together into some form of coherent wider public sector IT strategy is the responsibility of John Suffolk, the UK government CIO, who appears on this year's silicon.com CIO50 list. Among Suffolk's tasks is the re-building of a government IT profession decimated by two decades of wholesale outsourcing in Whitehall.

Helping Suffolk is a government 'CIO Council', which features the most important IT leaders across the public sector, including two other members of silicon.com's CIO50 - HMRC's Steve Lamey and Hampshire County Council's Jos Creese.

The CIO Council is charged with creating and delivering a government-wide CIO agenda to support the transformation of government and to build a public sector IT profession with the capacity and capability for major IT-enabled business change programmes.

Part of the transformational government agenda is a drive for central and local public-sector bodies to move to shared services - the sharing of back-office functions for things like HR and finance - as a way of cutting operating costs.

Woods said: "The overall efficiency policy and the need to get more for less continue to dominate thoughts of future investment and shared services are part of that."

Suffolk points to successes such as a Transport for London shared service centre that has cut one-third off the group's HR spend in its first year of operation and the NHS Shared Business Service.

But not everyone in the public sector is entirely convinced by the value for money arguments put forward to justify the move towards shared services.

Richard Steel, CIO at the London Borough of Newham - another public sector CIO on the silicon.com CIO50 list - argues: "There is a lot of dogma and hype around shared services. If you take shared payroll systems it should be a simple matter to demonstrate an organisation is paying so much per employee and that there are benefits in scaling up. An assessment of shared services' value and benefits ought to be put on a unit cost basis and I don't see that at the moment."

There is also more pressure on public sector efficiency following the Varney Report, published by the Treasury at the end of last year. It identified significant improvements and cost savings that could be made by reviewing the ways in which citizens interact with public-service bodies and encouraging increased take-up of the web.

The Varney Report also claims £400m of public money could be released by improving government call centre performance and reducing operating costs by a quarter. The recommendations of Sir David Varney, special advisor to the Treasury, will be fed into the 2007 Comprehensive Spending Review for the public sector, due out this autumn.

Local government IT body Socitm has found that following the increased investment for councils to meet the 2005 e-government targets of putting services online, IT spend has fallen back to below 2004 levels - despite the central role they will be expected to play in delivering modern public services.

That means tough times ahead for many of those in public sector IT. Ovum's Woods said: "The shortage in funding will put pressure on them to deliver some value for corporate services. It will be a lot of incremental development and exploitation of existing investment."

Newham's Steel said: "We are very much at the centre of the efficiency agenda. The expectation is that we will be in many years of zero growth. On a more general level in the public sector there is still far more to be done within an organisation to make it more efficient than just join up services."

One way of tackling that is to turn to the private sector. Woods said: "Outsourcing is an option that has to be assessed. We will continue to see local authorities looking at partnerships, looking to suppliers to help them fund transformation projects."

Among Steel's priorities at the moment are convergence, virtualisation, extending the council's network to other public bodies in the borough such as the police and voluntary services, plus business process re-engineering.

He said: "It's about getting the systems that we have used more effectively. When they say IT doesn't work, what they mean is the business processes are different from IT and they need to change business processes to take advantage of the IT."

Back in the corridors of Whitehall, given the historical problems with big government IT projects all eyes will continue to be on the NHS IT programme, the MoD's DII outsourcing deal and the projected costs and procurement for the controversial £5.4bn ID cards programme.