The National Audit Office (NAO) has found that the government has made a good start in reducing spend on IT, but that it still needs to work on delivering IT solutions that reform public services and the way they operate.
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In its report, the NAO found that the government spent an estimated £316m less than it would have done without new initiatives to cut IT spend from 2011 to 2012.
Overall spend during that period was £6.9bn, and although the Cabinet Office reported it had saved £354m as a result of the ICT strategy, only £316m met the NAO's criteria. The report states that weaknesses in the data held by the Cabinet Office meant that the NAO was unable to validate all of the savings that the government had claimed.
Of the £316m of savings that it could verify, the NAO said that £145m would be long-term recurring savings, £105m are likely to continue but are not open-ended, and £66m of savings were for the current financial year only.
Although the NAO recognised the reduction in costs, it also said that government had to focus on IT solutions that change the way it works.
"The Cabinet Office has made a good start on reducing spending on ICT by departments. However, it needs to develop a more comprehensive assessment of the impact and effectiveness of its ICT and procurement reform initiatives," said Amyas Morse, head of the NAO.
"The big challenge will be to move from savings initiatives to achieving digital transformation of the civil service and the public services it provides," he added.
The report recommended that the Cabinet Office publish assessments of the wider impacts of its initiatives, especially as it is starting to consider risk and performance on a more holistic basis.
The report said that the impact of the government's efforts to reduce the stranglehold of large IT suppliers and increase the involvement of small and medium enterprises (SMEs) was still unknown, and it had nothing to say about the G-Cloud, which aims to change the way the public sector procures and operates ICT. However, it did state that progress had been made by the Government Procurement Service (GPS) in establishing more robust ICT spend reporting.
"The suppliers we spoke to in 2012 felt frustrated by the slow pace of change and the lack of innovation being shown by departments. They felt that departments were focusing on cost-cutting rather than exploring opportunities for redesigning services; for example by putting services online as part of the Digital by Default agenda," the report said.
