A new deal with Oracle will save the taxpayer £75 million by 2015 claims Cabinet Office minister

Information and communications technology (ICT) is critical for the effective operation of government and the delivery of the services it provides to citizens and businesses. An efficient ICT system can offer key benefits, and give businesses and citizens simpler and more convenient access to transactional services and the opportunity to collaborate and share information. A cost-effective and functional ICT strategy is a fundamental tool that every modern state needs. The coalition government’s ICT strategy has been designed to deliver better public services for less cost, release savings by increasing public sector productivity and efficiency, and reduce the structural deficit in order to continue to fund front-line services.

The strategies builds on the ICT moratorium, project review and contract renegotiations which allow the Government to appraise and take control of spending and ensure that projects demonstrate value for money and effectiveness. It also further underlines the Government’s commitment to increasing transparency, through actions such as publishing government ICT contracts online. Such actions make it easier for the public to scrutinise how money is spent as well as opening up new opportunities for business.  The government’s ICT strategy is focused on driving real change in the way public services are delivered.

This drive for efficiency is perfectly illustrated by the new deal the Cabinet Office and Oracle have recently signed. The deal will deliver in excess of £75 million in savings by 2015, according to the Minister for the Cabinet Office, Francis Maude.  Oracle is one of the Government’s largest IT suppliers and works with almost every department and agency across Government. The deal redefines the way the government works with suppliers. The new type of contract offers several I advantages including:

  • A single discount

Historically different sectors of government bought software from Oracle on different terms and at different discounts. The new deal will mean that the government acts as a single, intelligent client, with all departments buying software using the same discount rate.

  • Licence sharing

Software licences can be re-used across departments rather than each department having to buy unnecessary additional licences that the government already owns.

  • Bulk buying

The government can maximise its buying power and buy in bulk as a single customer.

  • Shared services saving

The deal will reduce the government’s spend on back office , the so called “shared services” like HR and payroll by reducing the requirement for software upgrades.

Taken together, it is hoped these measures will deliver efficiencies that will result in savings in excess of £75 million for taxpayers by 2015 from just this one deal, releasing funds to support the delivery of frontline services. The deal follows on from the agreement reached earlier in the month with a deal with Capgemini which will deliver £200 million in savings. Tight controls on spending and a business-like approach to government have already  led to cash savings of £3.75 billion for the period May 2010 to April 2011 and the government anticipates a further £5 billion in savings this financial year

Oracle’s President and Chief Financial Officer, Safra Catz, commented on the deal:

“The relationship with the UK government has always been very special to Oracle. We are honoured to support its initiatives and to stand together in meeting the changing IT needs of the 21st Century.”

Cabinet Office minister, Francis Maude, added:

“This deal ensures better IT for Government and savings for the taxpayer. The days of the government paying different prices for the same goods or services are over – we will no longer sign inflexible contracts that tie the taxpayer into unfavourable terms. We are pleased to have made these savings with Oracle and expect more deals with other suppliers to follow.”

Oracle offered the single discount package because of the strategic importance of the deal with the government and the special nature of the on-going relationship. The deal it’s hoped will deliver greater value for the UK taxpayer whilst providing the government with technologies to build a robust and agile 21st Century IT platform.

Government Chief Procurement Officer, John Collington, commented:

“Oracle has been a long-standing and important partner to government and I am delighted that we have secured this agreement, which will generate substantial savings for the taxpayer – it is fundamental to delivering the government’s ICT Strategy. The simplification of the relationship will ultimately drive economic benefits throughout the government estate, and allow easier and more effective procurement of Oracle products and services. It will open up a new and collaborative relationship between the government and Oracle.”

In response to the Government’s call for better capability, Oracle will also establish a Centre of Excellence where government’s investment in its Oracle estate will be maximised by leveraging expert resources. This will be aligned to the Government’s ICT Strategy, ensuring the delivery of this important programme across government.