Atos Signs First Cost-Cutting Deal With Government

Atos Origin has become the first IT services supplier to sign a ‘memorandum of understanding’ with the UK government, as part of the fiscal belt-tightening being undertaken by the coalition government.

The memorandum of understanding follows negotiations that were launched by the Minister for the Cabinet Office, Francis Maude, in July. These discussions saw Maude meeting with 19 of the biggest government IT suppliers and consulting firms, in an effort to discuss how they can cut the cost of the services they provide.

Single Client Approach

And now the agreement with Atos Origin marks the start of a new ‘single-client approach’ to engagement with central government. Essentially what this means is that the government will in future procure IT projects as a single customer, rather than as separate departments, which is the current practice.

“We set ourselves a difficult challenge,” said Francis Maude. “Renegotiating contracts in this way had never been done by government before. But, the current financial situation meant there was simply no time to waste and we are delighted that Atos Origin are the first to sign today.”

“We had to start getting a better deal for taxpayers quickly and doing everything we could to take the cost out of government, not the front line. Through necessity, the process has been fast and sometimes tough, but as we near the end it’s clear there are going to be positive results for both sides,” Maude added.

Hundreds Of Millions In Savings

“Over the next few weeks as the agreements are signed, I expect to see immediate and big savings for taxpayers,” Maude said. “We’re not talking about small numbers here, but a total running into hundreds of millions of pounds.”

“But the work doesn’t stop here, the next more strategic phase is just as important and will involve more benefits for all parties,” he said. “We have substantially changed the way we do business and now we need to build on the really positive engagement of the last few weeks. This means in the future there will be new opportunities for businesses of all sizes, but also further savings for us.”

Meanwhile Atos Origin was keen to stress the importance of its relationship with the UK government.

“Atos Origin … will continue to deliver all its existing IT contracts to UK government, and will look for further business opportunities, building on the agreed centralised approach,” it said. “It will also resume a number of projects in IT and outsourced operations that were placed on hold while the negotiations took place.”

“These important negotiations mark the start of a new era for Atos Origin,” said Keith Wilman, UK CEO for Atos Origin. “We have the expertise to drive transformation through innovative commercial and technology solutions and fully support the UK government.”

Government Cost Cutting

Francis Maude also revealed back in July that the government would scrap hundreds of unnecessary and expensive government websites and slash the cost of the remaining sites to save millions of pounds. This came after a report by the Central Office for Information (COI) found that across government £94 million has been spent on the construction and set up and running costs of just 46 websites and £32 million on staff costs for those sites in 2009-10.

The government is acting after the shocking cost of Labour’s botched IT projects during its period in power was exposed in an investigation by the Independent newspaper earlier this year. That investigation found that British taxpayers had been left with a bill of more than £26 billion for computer systems that either suffered severe delays or ran over budget, or that were cancelled altogether.