Smarter IT deals save taxpayers millions

Better management of government procurement has saved the taxpayer £321m on £2bn worth of deals - many of which are IT and telecoms contracts.

The figures appear in the annual report of OGCbuying.solutions, the government buying agency which develops contracts and framework agreements aimed at offering big savings to public sector organisations through economies of scale.

Driving harder deals on IT and telecoms contracts has been key to generating much of the savings.

The IT framework agreements have remained the most popular in the agency's armoury, with sales in excess of £600m, including a £38m order placed by Norfolk County Council for a managed IT infrastructure project.

Starting the tendering process for an IT project from scratch can take several months if it has to comply with full European rules. But by using OGCbuying.solutions' framework agreements organisations can save 77 days by bypassing some stages of the process, the agency claimed.

The government's recently extended Memorandum of Understanding with Microsoft has saved the taxpayer £84m so far, and the discounts have increased further since the total number of licences bought by the public sector exceeded one million in February this year.

A new agreement with BT has reduced the cost of phone calls for large parts of the public sector and is expected to deliver £12m in value for money savings, according to the report.

OGCbuying.solutions said the reduction in tariffs it has negotiated with Orange and Vodafone for its mobile telephony framework agreement will also lead to savings of £100m by August 2006.

Spending on consultants through the agency has leapt up. Total spending through OGCbuying.solutions on consultants hit £300m in the last 12 months, against an expected £226m and compared to £186m in the previous year.

The agency said: "The majority of business comes from IT and management consultancy. This activity is driven by the continuing focus on eDelivery projects, particularly in central civil government and the associated process/change issues."

In addition, the broadband framework agreement established by the agency has had orders totalling more than £20m, it said.

OGCbuying.solutions has a target of £400m in savings for this year and its chief executive Hugh Barrett said: "We have a challenging year ahead but I am confident that we will build on our successes."