Government to save £70m in new software deals

Cabinet Office Minister Francis Maude has announced deals with IT suppliers Microsoft and SAP that it is claimed will deliver combined savings of around £70 million.

The deals, that will also offer benefits to police forces, local authorities and NHS trusts, are the latest in a series of government supplier renegotiations.

The new arrangements are designed to maximise the bulk buying power of government and end previous practice in which different parts of government paid different prices for the same products. Similar deals were announced earlier this year with the IT companies Oracle and Capgemini.

An estimated £65 million will be saved through discounts on Microsoft software licences. The new agreement provides better commercial terms, including a revised discount schedule for the public sector.

More than £3 million, expected to rise to at least £5 million by 2015, will be saved through new discounts on SAP software used for payment of invoices and civil service salaries.

SAP is used by a number of police forces and NHS Trusts in England as well as over 50 local government organisations, all of which will now be able to benefit from the improved terms on software licences.

Both deals will be available through the Government Procurement Service to police authorities, councils, health trusts and other bodies. These organisations typically account for two-thirds of total public sector spend with Microsoft.

Mr Maude added that there were benefits to business too, as government works more intelligently with big suppliers offering more transparency over future buying plans and more simplicity in public sector procurement.