Yesterday’s cuts announcement by Chancellor George Osborne referred to efficiency savings in government IT costs of just £95m (as some commentators have noted, this is less than 10% and as little as 5% of the figure suggested earlier by Peter Gershon – though, of course, more savings may yet be found and some of the surplus may be accounted for by delayed, stopped or re-negotiated contracts). Nevertheless, Osborne is reported to have said that the cuts were ‘based on’ Gershon’s work.
BT is a major government IT contractor, so some of the cuts here are likely to find their way through to BT’s bottom line via (eventual) contract re-negotiations (mind you, and depending how hard ball the contractual parties play – and that’s likely to be considerably hard – the expenditure of civil service time in negotiations to achieve this £95m figure is also likely to eat considerably into it). This is, of course, likely to have an impact on jobs in BT, although the overall effects are likely to be subsumed within BT’s own continuing programme of job cuts via efficiency savings (BT has removed 20,000 jobs over the last year, many of them agency workers and contractors but also including a large number of permanent staff), rather than being separately declared.
A smaller cut than expected is welcome – but still likely to represent bad news for workers in the IT and communications sector, and more pressure on trade union negotiators in the industry.