Suppliers may agree to be paid £800m less by government

Cabinet Office minister Francis Maude has since July been leading discussions with the heads of the 19 biggest firms working with Whitehall Departments, such as HP, BT, Capgemini, Fujitsu and Microsoft, to try to hammer out ways to slim cost out of both existing and any future deals.

 

Maude's mission was to commence "renegotiating with [our key ICT partners] across everything that they do for government [so as] to get the cost down".

 

His team went in looking for cost savings in both the immediate and longer-term, it is believed.

 

Those discussions are now said by insiders to be nearing fruition, with announcements probably lined up to buttress the October Spending review austerity measure packages.

 

The £800 million figure floating around may prove to be too high but at least one civil service press representative believes the final re-structuring will amount to “several hundreds of millions of pounds” at least.

 

The re-cast deals are said to fall into two types: suppliers agreeing to move to more standardised and easier to adapt offerings and firms who say they'll drop prices now but will want longer to meet the original contractual deadlines as a consequence.