back to article Tories to cut IT to keep National Insurance down

The shadow chancellor today announced cuts in large IT programmes would form part of a £6bn public spending squeeze under a Tory government, that would be used to cancel most of a rise in national insurance planned for next year by Labour. Under the plan to slash "without reducing the quality of front line services", George …

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As long as the cuts include the NIR

that's fine by me.

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FAIL

Let me get this right...

...'efficiency savings' transferred into English, in this instance means reduce government spending (and thus jobs) in one sector by, say, 20%, so that those in other sectors who DO still have jobs, can have a tax cut of 0.5%?

Surely given the amount of pain to go around, it's better to share it as evenly as possible? Unless the goal is to reduce the number of skilled workers in IT - y'know, what with it being an outmoded sector, and all, like wooden shipbuilding or so?

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Troll

Tax cut

The current chancellor states that he wants to "encourage recovery", but his planned increase in NI contributions is a tax on jobs and that will do nothing to encourage people to create jobs in any sector.

The big government IT projects are failing badly, so I'm not entirely sure that it makes sense to continue to throw good money after bad. Most of them also seem to rely very heavily on IT workers from overseas, so I don't think that will affect IT workers in this country as much as you think.

And I'm betting that as you are anon, you are a troll

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Re: Let me get this right...

your post doesn't make much sense. the idea with efficiency savings is that you target the areas that are actually inefficient, not 'share the pain around' regardless.

i'm not saying that the 'proposed savings' aren't nonsense though.

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Nope

I've worked on quite a few government IT projects in the last 20 years and they very rarely use overseas workers, the various departments are usually very worried about data vanishing off to foreign climes (I know, ironic given their staff's propensity for leaving it on trains).

In fact even using people with non-English grandparents leads to significant delays in gaining approval for them to work on a lot government projects.

TBH, I'm not sure they can save much money by cancelling a fair few of the projects because a lot of them are to modernise old systems that are running hardware that's 15+ years old. Maintenance bills are huge as parts are very difficult to come by.

Don't forget, too, that any project that's already gone live will have data on it that needs to be disposed of in a secure fashion and for government data that normally means shredding of disks (yes, hard-drives). That isn't cheap to do. Very wasteful if you spent a couple of million on kit last year only to shred it this year because the project got canned.

Yes, you need to look very carefully at new systems, but a lot of the "new projects" would only save money in the short-term if cancelled.

For example, if System X was installed 20 years ago and costs £1m in maintenance each year, then it may well be worth spending £2m to replace it with a newer system that costs £100k in maintenance each year. If you cancel the project then you "save" £2m this year, but next year you're spending £900k more.

Personally, I'd like all large businesses subject to the same auditing and publishing requirements that government IT projects are so we can get some perspective. Starting with the media. I strongly suspect that government projects are no worse than anyone else's, but they're the only ones open to serious scrutiny.

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Headmaster

@ Tony S, @ rastansaga

It was my post and I wasn't trolling.

Tony S, what will encourage job creation (frankly, replace that with "avoid job destruction" in this economic climate) is the maintenance of aggregate demand.

I really think that before you quote economic illiterates like 'Slasher' Osborne (he of the 'tax on jobs' line), you learn something of the subject yourself.

If you throw a quarter million people out of work to fund a 1% income tax/NI giveaway for the other 25 million, then you have to pay dole money for the former, and for the people they shopped with, and you face further investment stoppage as wealth-holders anticipate demand shock. You lose skills and capacity amongst a key strategic sector.

In this case efficiency needs to mean efficient use of resources towards maximum long-run employment. That's the war being fought. There is so much pain, i.e. austerity to go around, that it needs to be shared evenly amongst society (although I don't mind if you sack all the consultants...). If you ringfence one sector from having to absorb cuts (e.g. everyone except IT, with this NI cut), then you have to lay so much more pain onto the remaining sector(s).

Now go away and read your macroeconomics.

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Anonymous Coward

@Puck

In the sterile world of theoretical economics, there's little argument against your post.

However, in the real world, canning the NIR and ID Cards project would not throw that many IT workers on the dole (a few consultants but we don't really care about those). There are a significant number of other projects that will cost similar amounts and would not cause mass unemployment if they too were canned.

Despite stories to the contrary, the IT sector is still fairly bouyant so those that did lose their jobs would mostly find new ones.

The proposal to increase NI is all in the name of 'fairness'. Well, is it fair that the same small sector of society (working people in the middle income bracket) are constantly being tapped up for more tax revenues?

Finally, despite the AC tag, this isn't a troll, I'm currently involved with one such project and my employers would frown on my productive use of their time :o)

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@Puck

I'm not quoting anyone - I'm capable of making up my own mind. As an an employer (in manufacturing) I help to create the wealth of the country - perhaps that gives me an insight?

The so-called Tax cut is nothing of the sort - it is simply not going through with a proposed increase and one that would cause a lot of businesses considerable discomfort. The proposed increase affects them more than the individual worker. The increase in National Insurance would make it harder for smaller businesses to employ people - and they actually employ more people than the government.

Why was the proposed increase in NI put forward - to reduce the National Deficit? No, to fund proposed increases in government spending. (And I am against any further increases in spending, we are already desperately in debt and need to reduce it not make it worse)

Who is talking about throwing 250,000 people out of work? I made no such comment. If you believe that to be the case, where do you get your numbers from?

What is the difference between a dole benefit and a government paid job? If you ask which is better, paying someone £100 a week or paying them £500 a week, the simple answer is the former - but it is not that simple. There are a lot of other things to consider.

I am all for efficiency, but somehow I doubt very much that the current government will know how to even start (yes I do - they will employ another set of consultants and create a new database!) I'm not entirely convinced that the current opposition parties would do better.

Definition of an economist - someone that failed their accountancy exams. Definition of a macroeconomist - someone that failed their accountancy exams big time!

And I still think that you are a troll.

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@ Tony S

“Who is talking about throwing 250,000 people out of work? I made no such comment. If you believe that to be the case, where do you get your numbers from?”

In this article George Osborne talks of £6bn cuts. The Engineering Employers' Federation estimate £27k as being ‘a job’. http://www.independent.co.uk/news/business/news/ni-increase-to-hit-employment-in-half-of-firms-643812.html , although obviously consultants are paid a lot more.

"What is the difference between a dole benefit and a government paid job?"

(Sighs).

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@ Puck

First of all, no amount of money is "a job". A job is work that people do.

£27k may be the average wage, but the cost of a job is far higher. For example training, NI, benefits, offices, equipment, PPE, etc. etc. And I will once again point out that this is not a cut, it is cancelling a proposed increase which has not yet happened. Unless they have taken on people before the proposed increase took place, there will be not be a reduction in staff by not going through with the increase.

The NI increase is a tax on employment, just as road fund licence is a tax on motoring, VAT is a sales tax, excise duty on cigarettes is a tax on smoking. Just because it is called insurance does not change that.

Both dole benefit and a government job are paid for by the taxpayer. So which is less costly to the taxplayer - paying £100 a week or paying £500 a week? (I will accept that in reality the costs are much closer, but the point is the same.) Only government employees seem to fail to understand that. Dare I suggest that you appear to be a government shill?

I think that the basic problem is that you refuse to accept the fact that the country owes more money that at any time in history. Over £900billion (http://www.debtbombshell.com/) and climbing. Servicing that debt is the second highest cost on the national expenditure, second only to the cost of NHS. And it is climbing higher by the day.

We can do one of three things.

1. Do nothing. Hope that the economy will pick up and somehow the increase will pay off the debt. It is highly unlikely that will be possible - as the economy grows, the cost of servicing that debt will also increase as interest rates increase. Many of the readers of ElReg will not remember the days of 15, 16 or 17 % mortgages - I do and it is painful.

2. Refuse to pay the debt. A disgusting alternative that has not happened since the 1600s (although Wilson came close in the 1960s) and I would suggest that any chancellor that made that proposal should be thrown out of the job and never allowed to take a public office again.

3. Bite the bullet and start to address the problem. However, the situation is so bad, that it requires both cuts in government spending & increased taxes - and yes it will be bloody painful for everyone. The sooner we start, the better it will be for everyone. Delaying it does nothing but allow the problem to grow worse.

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Coat

Government Contracts – watch out!

Always the same on change of Government. Anyone who holds a Government contract must be prepared to accommodate major changes through policy shift due to change in political leadership.

From what I hear (and I did check) this will mainly hit those short term development, and support contracts associated with Labour quangoes. But, the Conservatives should create their own equivalents so new contracts will become available. The larger contracts may be restructured or cancelled. The important point to remember is timescales

Hmmm..I hope those who have IT contracts in place made sure they were watertight before signing.

Now - wheres that contract gone?

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Grenade

Then he shall stay a shadow with this mentality

Now had he said something like:

1) Centralise inhouse all govermental IT projects and contract in skill-sets/knowledge as and when needed and deemed more cost effective and for cross-training the centralised pool.

2) Allow IT projects to be defined by a IT Accountant (???)

3) more profit == lesser costs.

If there is profit to be made then it is better kept inhouse and as such save money than to dish it out when you cant garantee were it ends up, spend inhouse to keep inhouse and as such, keep the country better balanced on the books.

Or you could killoff any form of technology with a veiwpoint of allowing people to hand-plough feilds again, no, realy, sure, sounds like it.

Anon as frankly it dont matter and all that jazz.

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Good

Far too much taxpayers money gets squandered into the back pockets of the big consultancy firms charging ridiculous daily rates for useless consultants. Boo fucking hoo.

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Naive or what?

I agree with the sentiment - too much valuable tax payer dinero being tipped into troughs for the consult-o-pigs to feast on.

Unfortunately, you missed the key phrase - "Ongoing project would be cancelled if they were not delivering value". But, how do they decide if a project wasn't "delivering value"? Yes, that's right - they bring in some hideously expensive external consulting _team_ to "evaluate" it.

So instead of money being spent on delivering the "product" it gets pi--ed away doing "studies". Worse still, the project team'll get stopped while their project is "in review".

I saw this happen with Major's government and defence research - at the end of the day they ended up with a far more expensive arrangement delivering worse quality research with more admin required. But at least a lot of chinless ones made a very tidy pile of cash.

Good luck on the contract renegotiations btw - I'm willing to bet that the companies concerned have made sure that the i's are dotted and t's crossed. But if these negotiations are ahead of renewal time then I suppose it's another opportunity to waste money whilst appearing to be working hard.

Sorry, I'm just in a very cynical mood this morning...

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FAIL

You do know how PFI works, don't you?

Or rather, you *don't* know how PFI works.

What happens is that the government agrees to buy a "service" for a number of years in exchange for the big consultancy firm building it..

It's much like your mobile phone contract, you don't pay the full price of the phone up front (generally) and it's spread into the monthly service charge over a fixed time period.

Same problem applies to both scenarios, though. If you sign up for £75/month 3000 free minutes, unlimited texts and only use the phone for 5 minutes and send a dozen texts, then you're wasting money. If you sign up for £15 month 100 minutes and 50 texts but then use 1200 minutes and send 300 texts then you'll pay through the nose. That's not the phone company's fault.

The government sets the parameters for the IT systems they want and the IT guys build them and set the charges based on those figures. If the figures are wildly out (and they often are) then either the government ends up paying for a service it doesn't really need or they end up paying more to beef up the underspecified service.

Going back to the phone analogy, if you opted for the lower monthly charge you would almost certainly have paid more for the handset you got (or got a lower specification handset). You would almost certainly be able to just switch onto a higher tariff, but if you opted for the free-but-crap handset they you'd be stuck with it (or have to pay full price for a better one if you wanted it). However, if you opted for the higher tariff (with a very nice free handset), then the phone company would expect you to stay on that tariff for a minimum amount of time before you could drop to a lower one.

I suppose there's a third option. Buy all of the components and build your own mobile phone and mobile phone network.

You might think this money is being wasted, but I worked in HMG IT for a few years at the start of my career and I can tell you that an awful lot more money was wasted.

- Most sites had their own technical teams on site

- Technical teams were split into skill sets and were not allowed to work on each other's stuff (i.e. Database people could not do *any* sys admin work, Windows people could not do *any* unix or mainframe work). That meant no cross-skilling and teams of at least four for each skill set to cover holidays and sickness. Or put it another way, four unix guys on a site to look after ~20 machines. And four on another site to look after another 20 machines.

- People were defined by job grade, not skills, so if someone got promoted they could be doing database admin one day and be in charge of building maintenance the next. Or even the other way around.

Really, the grass is not greener - it never was.

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Stop

There's your problem, right there

"opposition parties are not allowed to inspect government contracts."

And neither is anyone else - "Commercial, In Confidence" is always cited. Now, if two commercial organisations want to enter into a contract and keep the details secret, that's fair enough (probably, though I could argue a case against) - it's their (shareholders') money, after all. But if our civil servants enter into a contract, then IT'S OUR FSCKING MONEY and the details damn well ought to be public.

Given the amount of gravy that's usually attached to such contracts, I can't imagine many of the usual suspects saying "well we won't bid then, if that's your attitude". And the one's that won't play ball are probably the ones we can well do without.

Public scrutiny of these contracts should be our right as taxpayers. Though I can't be held responsible for the number of heart attacks that would probably result if all the details were ever to be aired.

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What happened to 'Invest to save'?

Strange how when the economy is strong IT projects are always touted as driving efficiency and saving money, but now they are seen as frivolous expenditure.

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Gates Horns

Well, They May Be Right On This One

IT is famous for over promising on schedule cost and savings.

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Astonishing

Incredible how will the Tories ever manage to reduce government spending without decent IT?

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Go

If this means

That the NHS IT project is scrapped then good riddance!

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What's that, Darling?

"George Osborne's savings are so flaky, he's admitted he doesn't even know which department is going to pay what,"

How is Osbourne supposed to know specifics when he's not allowed to look at any of the actual data? Talk about a stacked deck...

Besides, I thought Labour were busy rushing through all their IT contracts and adding obscene cancellation penalties to prevent the Conservatives from cancelling all their IT projects when they get into power.

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IT Angle

NPoV

Any chance that, as the election nears, the Reg sub-eds might try to inject a little skepticism into the headlines on stories like this? All the parties[1] are making statements about their future plans, which may or may not be sincerely made now, and may or may not *actually happen* if the party concerned wins. (Note, I'm not claiming the Tories are worse at this than Labour, I'd just like to see words like "claim" or "assert" or "promise", rather than "to" or "will", as if it was completely certain to happen just because they've said so.

[1] Except the Liberal Democrats[2] of course, who are cushioned by the comfortable certainty that they won't be forming the next government and can therefore afford to be completely honest. (There's a chance of a hung parliament, of course, but if the Lib Dems get some representation in a coalition government -- a minister of state or two -- they'll have to cherry-pick one or two policies to try to implement, and one of those slots has been booked for a referendum on P.R. for, ooh, four or five decades now. )

[2] I just =love= telling an American we have a mainstream party with that name.

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(Written by Reg staff)

Re: NPoV

We might. We might not. Rest assured that a) we're not Tories and b) we still don't take direction/notes from commenters. As you were.

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Anonymous Coward

@SB

"we still don't take direction/notes from commenters"

With an attitude like that you'd do well in central government.

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Coat

What he didn't say

"We are going to purge management ranks of the grossly overpaid drones who do not deliver medical are."

Without knowing any details, I'll wager that half, perhaps three-quarters of NHS managers (and their flunkies) could be dispensed with.

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Unhappy

I am so sorry Bob!

Dear Bob,

Sorry to hear that our IT buget has been slashed but that also means that

the hard drive you have been needing for the past 5 years for your main use desktop system

has been denied so you will need to suck it up and use your system on your slow failing pc.

You may want to pay out of pocket for a new one yourself but I doubt you will be reimbursed.

Only CEO and VIP get new hardware. Chaps like you and me at the middle or bottom barrel will have to scrape by with DOS or Windows NT 4 for a while bit longer.

Have a nice day!

Richard.

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Anonymous Coward

NHS has had it.

Based on what I've seen delivered, I could have written it in short step development, (known these days as Agile,) in less than a year.

I'd have charged less than a billion for this.

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Wonder which ones have posion pill clauses in their contracts

Along the lines of "Government cancellation of this contract will require 50% of the total cost of the contract to be paid"

My bet will be *all* of them.

But they should all be canceled.

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Pirate

Grim Reaper

Tories smashed heavy industry and manufactureing - now they want to smash IT Services - vote with your wallet - cause if you vote for them it will be even more empty than it is now. Don't be fooled.

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Asshat

"George Osborne's savings are so flaky, he's admitted he doesn't even know which department is going to pay what," the Times reports a spokeswoman for Alistair Darling said.

Bit difficult if you're not even allowed to see the accounts. What a total twunt. I'm not quite sure I understand why opposition parties are not able to inspect Government contracts as it tends to lead to a lack of oversight - especially considering the fact that people don't inherently trust politicians. A bit more oversight into what these arseholes have gotten us on the hook for over the last 13 years certainly wouldn't go amiss.

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More Tory nonsense

How can he make statements about making cuts when as people say he hasn't been allowed to look at the contracts or the data? Does he really think the big companies are going to let him tear up contracts? Or does he fancy seeing the Government embroiled in a protracted legal battle? More dog-whistle politics to me - believe this and you'll believe any old crap.

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Anonymous Coward

Prediction:

2 months after winning election:

"Sorry, can't actually cut as much as we said we would, because our predecessor hid X and Y in the books."

(Prediction based on past performance of all politicians)

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Well thats

them loosing my vote....Not a good idea at all in this volitile market to stop spending...This will increase unemployment to unprecedented levels...

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Re:Well thats

So it would be a good idea to send good money after bad and maybe vote back in the Government that spent in the good times so we had no money left to spend in the bad?

As for increasing unemployment to unprecedented levels that normally happens when Labour loses an election as they tend to spend their whole time in power employing everyone under the State umbrella in order to artificially lower employment and be able to tell you "you've never had it so good".

A basic understanding of economics and how to save in the good times so you have funds for a rainy day would be a good education for Labour. Let's just hope there's a shiteload of oil under the sea in the Falklands that we can get the revenue off of.

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Happy

AC@05:15

"Not being born rich I would never vote for them anyway, don't see why anyone would tbh, smarmy gets"

I salute your sense of class loyalty comrade.

Pity it's not really shared by the Labor party.

You might like to note that "Social mobility" has fallen under 13 years of Labor rule. Norman Tebbit said people should be "educated to know their place," but it took Tony Blair and his successors to *implement* that POV. While the divide between the richest and the poorest has increased even further.

The rich have done even *better* under Labor than previous administrations while the poor have done *worse*, so the working class are cornered with fewer chances to move out of the life they are born in.

Like rats in a trap.

Perhaps you live in the sort of constituency that would vote Labor if they put up a pig as the candidate. Remember the Glasgow with it's 26000 Labor majority, which turned into a 4000 vote SNP majority. The one next door to the Speakers constituency?

The British electoral system only allows 2 options. Vote the existing candidate back in or dump them by voting for the last runner up. *Every* other vote is wasted. lame duck governments usually start promising electoral reform in the same way some alcoholics promise they will *never* take another drink. Next day they are down the bar again.

37 days probable. 72 days maximum.

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Alert

Every cloud has a brown lining

Ah, we find the reality of Cameron's wilingness to bung all our data in to the cloud.

Fuck all to do with politics or tech or public accountancy or anything other than a quick short-term "Bung it all there and sack the staff" is what it's all about.

Bung it all on foreign servers and we can do a way with laptops, CD's and memory sticks to lose a few thousand items of personal info -- bung it all on foreign servers and lose the bloody lot, then blame it on Johnny foreigner.

Put it all in to the lovely shiny cloud and we'll get a shower of turds in return.

(Not that we've been told how much it's gonna cost to get it all there.)

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Happy

Regarding NHS IT

There are some *fairly* simple questions that *could* be asked.

How many more more patients are being treated now than prior to the project start up (it's been running how many years?)

Has the proportion of *emergency* admissions risen? IE is at least part of *any* rise due to cutting time as an inpatient and fixing them again when the surgery cause complications (I assume the complications have not killed them before re-admission)

If the answers turn out to be "None" and "quite a few" I'd call FAIL.*

*I am not a health economist or system implementor

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Stop

Good to a degree

There are some terrible projects out there, but it seems to me that where governments have really missed a trick is in creating unified and centralised systems where they could have just been working to create data interchange specifications and then allowed the market to provide solutions- as long as your different police forces/nhs trusts/whoever have systems that can interoperate in a standardised way it really shouldn't be government's job to tell them how exactly to do that.

I tend to think that politicians take a "let the market decide" attitude far too often with regard to things where there is no market or where the market will decide poorly, but in this case they really could have done a better job and probably saved money at every level.

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Coat

WTF

Ridiculous idea, get your coat.

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totally agree

been saying this for years now. why can't politicians/bureaucrats/organisations take the good stuff from the net (i.e. distributed interoperability) instead of the merely trendy (twitter).

i had an interview for a health organisation as a data architect a few years ago and the first thing i asked was how they managed standards in the health space (assuming the spine would be based on some sort of standard) and was told there was no such thing. anyone know if it's improved?

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Happy

They make the law

There's no such thing as a watertight contract with the government, as many civil servants expecting their redundancy pay, or police officers expecting their agreed pay rises, have found. Since they've got the power to change the law, presumably an act making the performance of the contract illegal would render it frustrated and unenforceable. Right after repealing the human rights act, so the IT companies couldn't go crying to the European Court about being cheated out of their precious cancellation penalties.

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Stop

Slash IT spending?

Having worked on government funded IT contracts I can confirm that the government and taxpayers are being milked.

The "Gate System" which is thrust down the necks of contractors/consultants is abused to such an extent that it's little wonder that every single IT project implemented by the Government comes in massively over-budget and not fit for purpose.

I'll agree that intelligent spending on IT is required, but without anyone of any technical competence in our illustrious Government running these projects, it's little wonder we get utter cr@p.

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Happy

Unlike the US

HMG does not have the power to unilaterally cancel *any* contracts.

There is even (AFAIK) an "Unfair Contract Clauses Act" in UK law.

How often it's *used* OTOH is another matter.

BTW given the NI rise has *not* happened yet, *not* having it cannot really be called a cut.

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FAIL

It is the policy not the details that matter

I'm probably late to the debate (as usua!) but for me it is the overall policy that matters, not the details.

In my local council, the Tories attempts to keep the council tax down to please voters The result is that we've used up all of our reserves in running the district and now we are in panic mode losing staff and over working the poor sods that are still here. (while the Chief Exec gets an average pay rise of 10% over the last 5 years, but don't get me started on that.) You can view that a number of ways...

1) Bad management mis-spending the money we've got.

2) Bad government allowing said bad management to continue either through not taking action, not correctly auditing them or having their noses in the trough alongside them. Take your pick.

3) The residents just aren't paying enough tax to cover the services ... in which case either services get cut or we have to pay more tax. (Lets face it, the government ain't giving us any extra)

The conservatives trying to keep tax down is about as large a red herring as a certain space ship occupied by one Dave Lister, a genetically evolved cat and a powerful computer with a wit only a fraction of the sharpness of the plant it is named after. (Can you count a hollogram as an occupant?)

The Tories cutting IT projects that aren't returning value for money is just spin doctoring that skims the surface to win votes ... if the aims of a project are laudible then an investigation needs to be undertaken in to WHY it is not delivering value for money. Just arbitrarily cutting them is a nonsense as it could prevent us progressing in areas that we do need to imrpove in.

That said, there is really no excuse for Labour to have been asleep at the wheel on those projects, either. The whole thing smacks of bad management and I don't trust anyone to actually have a workable solution to this one.

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Happy

Sounds like a smashing idea

let's cut more government projects, IT or otherwise and cut taxes at the same time.

There is a lot of open source, free of charge software out there, so they can start using that to bring costs down even more.

Labour has only ever used IT as a means to increase government control, never to improve government efficiency or as a wise investment in reducing government cost, so most of it does need scraping.

IT works better outside of government, so with more spendable income floating around it will stimulate business, and business does attempt to use IT correctly which is to improve matters, not make them worse.

No one in their right mind, really wants an IT job in government, they look incredibly boring in the main, and counter to what IT should be about.

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I don't care!

Dear incumbent government,

I'll happily renegotiate the contracts I have. But you won't get any service improvements that I feel would be of benefit to you even if they are sometimes outside scope, and I'll work strictly to the letter of the contract when you change your mind. I can guarantee my life will be easier and yours will be neither better, nor cheaper in the long run.

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