THE BLOG

Another Cloudy Public Spending Debate?

08/07/2014 15:29 BST | Updated 07/09/2014 10:59 BST

Say 'public sector IT project' to most people and the reaction will most likely be a deep sigh or a raised eyebrow or two. However, the high-profile budget overruns, the long-drawn out implementations and the huge payments to consultants that cast this particular die mainly happened a number of years ago. As tax-payers, we all hoped that the situation had improved by now.

After all, only recently the Government's G-Cloud and digital commercial programme director, Tony Singleton, claimed that public sector organisations have saved over £120 million by buying services through the G-Cloud framework - the centralised pool of government-approved cloud-based applications. So is cloud technology the answer - especially at regional, county and local levels? It's estimated that by sharing infrastructure costs and moving to the cloud alone, country councils could potentially take 20 - 25 per cent out of total IT costs.

Unfortunately the happy ending is still some way off. Intrigued by Government claims and eager to know the true story, Bull recently carried out a Freedom of Information request on the whole question of Local Government IT. The results paint a far more sobering picture than the one the Government tries to portray.

Between them, the UK's county councils spent nearly £440 million in the last financial year alone on all aspects of IT. This includes the employment of around 3,250 staff - an average of around 120 IT staff per county council - plus support services and outsourcing, software and hardware systems.

And guess what? Over the same time period, only 12 separate services (not per council, but in total) were procured from G-Cloud. The total spend was just over £385,000.

Of course, Government organisations are risk-averse by nature and are likely to be more wary about putting their data in the cloud than some private businesses. So is there another way these county councils are making sure their operations are running as efficiently and cost-effectively as possible? In other words, aside from staffing costs, where is the money going?

In our experience, one of the biggest hidden costs of IT comes from spend on legacy systems. But not unsurprisingly, our research revealed that a number of county councils don't necessarily have a handle on how much they spend here and some don't even see this as an important issue.

It's not just worrying, it's shocking at a time when staged Government spending cuts are still coming into effect. It's clear that the G-Cloud is not giving these county councils the confidence they need in the cloud. But not only has the government spent money setting it up - the private cloud providers included on the list have had to jump through hoops and spend their own budget to gain approval too. Among them are SMEs, attracted by Government promises to include a certain quota of small businesses on Government contracts.

It's a waste all round and anyone can see that the approach is flawed. There are too many barriers to uptake. The red tape surrounding procurement means county councils are often tied into long-term contracts with large enterprise suppliers and are not flexible enough to take on the transformational change that the cloud demands. Also government employees often lack the procurement experience, expertise in the solutions themselves and the inclination to disrupt the status quo.

Meanwhile, for most of the companies on the G-Cloud list, the phone will have remained silent. Most UK county councils have never used it. It's clear that county councils have some major cultural and structural issues to address to enable them to start taking full advantage of new technologies such as the cloud. Until then, I'm afraid, there will be more tut-tutting and exasperated sighs.