Maude starts big IT supplier cuts talks

Francis Maude, the minister for the Cabinet Office, has met with 19 of the biggest government IT suppliers and consulting firms to discuss how they can cut the cost of the services they provide.

The government is aiming to renegotiate existing contracts to achieve savings. Firms involved in the negotiations include the holders of the local service provider contracts under the National Programme for IT in the NHS – BT and CSC.

They also include other key IT suppliers to the NHS, such as Fujitsu, Atos Origin, Logica, Oracle, Capita, Siemens IS, Cable and Wireless, Microsoft and Accenture.

Other firms involved include Vodafone, G4S, Serco, Hewlett Packard, Capgemini, IBM, Telereal Trillium, and Steria.

The contract renegotiations are the latest in a series of initiatives introduced by the newly created Efficiency and Reform Group, which has been set up to find £6.2 billion of savings from government spending over the next year.

The Cabinet Office said that the event has marked the start of the process to renegotiate key government contracts and that the negotiation programme will cover the majority of government’s suppliers and will be conducted centrally for the top suppliers and then by individual departments for the smaller ones.

Francis Maude, who co-chairs the Efficiency Board, which oversees the work of the group, said: “The meeting demonstrates the importance and urgency the Government is attaching to the efforts to reduce the deficit.”

“Given the really difficult economic climate we now face, we have to do everything we can to deliver better value for money for taxpayers and that involves taking some tough decisions.

“I am laying down the challenge to major government suppliers to ask them what they can do to take costs out of contracts.

"Some of this will come out of margins, but we will also invite ideas on how we can structure things differently to reduce complexity and cost. We will look to put into effect immediate savings and also create plans to further reduce costs in the medium to long term.”