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By | Guardian Government Computing 2nd March 2011 15:34

UK extends IT spending controls

Every contract over £5m needs Treasury, Cabinet nod

All central government IT contracts worth more than £5m are to be subject to approval by the Treasury and the Cabinet Office.

The move is intended to provide long term measures and replace the interim changes introduced when the coalition government came to power.

A spokeswoman for the Cabinet Office told GGC that, whereas all central government IT projects worth more than £1m have had to be approved by the Treasury, departments will now have more freedom to initiate projects of up to £5m as long as they keep to the relevant guidance on common infrastructure and open standards. But contracts worth more than £5m will have to go through both departments.

"This will ensure best value is achieved and that ICT solutions bought have a common infrastructure and open standards, allowing them to be used across public bodies," said the spokeswoman.

"We are also going through all large existing contracts to ensure they represent good value. To date, over 300 ICT projects have been reviewed and we are working with departments to stop or de-scope contracts worth £1bn."

The move was announced in the department's response to a report from the Institute of Government which says that Whitehall needs a more agile approach to implementing IT projects. "We welcome today's report, which shares our ambition to drive waste out of government functions including IT and will help to shape our IT strategy going forward," the spokeswoman said.

The change is part of a wider package of spending controls and financial processes to be in place until the end of the Spending Review period in 2015, aimed at providing more than £3bn in savings by the end of this financial year.

The package includes the need for central approval on new property freehold purchases, leases and extensions worth more than £100,000, government campaign spending over £100,000, and a continuation of the temporary freeze on recruitment and consultancy into the Civil Service. In addition, a Major Projects Authority is being set up to oversee the management of large scale projects, and nine common categories of goods and services – including energy, office supplies and travel – are to be procured centrally by October 2011.

Francis Maude, the minister for the Cabinet Office, said: "As well as immediate savings, some of the new measures introduced today will enable us in the future to get rid of previous inefficiencies in the way we have bought goods and services and reinforce that, as one of the country's biggest customers, government expects to receive a scale discount."

This article was originally published at Guardian Government Computing.

Guardian Government Computing is a business division of Guardian News and Media, covering the latest news and analysis of public sector technology. To register, email at Guardian Government Computing.

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