Cuts, Cuts and a way forward?

As part of working with SOCITM Futures, we considered a report recently published by CIPFA/SOLACE on Public Sector Funding (After the Downturn). The report considers 2 scenarios for future funding neither of which is palatable. The first, ongoing cuts of 7.5% pa in real terms over the next 3 year spending round and beyond; the second 15% in real terms over the next 3 years and reduced after that. The real impact of such scenarios are even more dramatic as essential services (NHS and Schools) are protected, producing cuts as high as 20% for unprotected services in Local Government. We could see whole functions, such as Leisure services, disappearing altogether into the private sector. If this proves to be realistic, rather than just scare mongering, then the question “are IT Departments sustainable” will be asked? Certainly for smaller districts shared services seem almost inevitable.

Having been through similar, though possibly less stark experiences during my 23 years as a Local Government CIO, what can we expect? Directors of Finance will be looking for big budget savings. Let me be absolutely clear, that does not mean projects that could save money by investing more, but lopping big money off existing budgets. A root and branch appraisal of all expenditure. Which service is absolutely essential? Which members of staff can I lose but still keep services going? Or as my Director of Finance said privately “use it to get rid of the deadwood”. Yes, the term was not very PC and it was a few years ago but it is hard to disagree with the sentiment. At the end of it all, we came out more efficient and effective than ever (Newham). But not a pleasant experience all the same and some friends were lost along the way.

What may surprise some was that I always found this a good time to get new ideas and opportunities through. Surprisingly the risk appetite is greater and I always found that the “dinosaurs” were too busy protecting their own empires to worry about what I was doing. So what are the hot opportunities now?

Obviously, it’s a good time to push through self service and possibly close some traditional outlets – face to face in particular. Some might like to consider opportunities presented by Open Source – and why do officers need Smart phones, laptops and desktops? Do I need full maintenance on kit or could ‘fix on fail’ provide savings?

More longer term, I would be considering the opportunities presenting themselves though the Cloud. With greater economies of scale, buying power, standardisation, automation etc commodity services can be delivered at a much lower cost than in house. Private sector companies such as Bechtel have achieved savings as high as 60%. If I were back in LG, I’d start low risk – moving development machines onto Infrastructure as a Service (IaaS). Possibly whole platforms could be shifted where I start to load the requirement for ‘difficult to recruit’ support staff onto others (Platform as a Service – PaaS). Eventually I’d be looking to put live applications out (Applications as a Service- AaaS) and number one would be email and collaboration services – generic services where there is a minimal requirement for customisation.

The potential drawback is security concerns and with the Cabinet Office we are seeing developments in the idea of a Government or G Cloud. This seeks to exploit the Public Sector Network (PSN) to connect to secure data centres. Working with my old GC Director Dilip Parmar, we are attempting to get like minded LG CIOs together for a quick wins workshop session (February). The project pulls together private sector initiatives into the quick wins initiative. Its surprising the number of applications – email (C&W), collaboration, CRM (Lagan) etc that already are available. There are concerns as IT Trends highlights but we are intending to work with the Cabinet Office to address them (http://bit.ly/8rBu8j).

The view of industry experts such as Gartner, is that by 2012, 20 per cent of businesses won't own any of their IT assets, including servers, PCs and software, turning to leasing, employee ownership schemes and cloud computing instead. Interesting, then to consider that middle item ‘employee ownership’. Currently the GCSX Code of Connection prohibits use of non controlled PCs. Working with the Devon e-Partnership we are hoping to get CESG approval for the use of the Becrypt Trusted Client device that boots up from an encrypted memory stick. Effectively, it separates the contents of the drive and the use of Trusted Client for remote access. The project will go to a Design review in February and if agreed it offers the possibility of remote access for around £50 per head. The Devon and Torbay business case is based around flexible working rather than full time use.

Final thoughts on surviving through a cuts programme – remember who is the usually the most expensive ICT person on the payroll. It’s the one name in ICT the Director of Finance knows. Still think you can afford to bury your head in the sand? Start preparing your action list now or you may be the first name on the list!