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Budget gives information technology key role in UK recovery

Efficiency gains and cost savings rest on IT systems

IT will have a key role to play allowing Chancellor Alistair Darling to meet his budget promises of investing the UK's way out of recession.

The Chancellor said efficiency savings, which should rise to £9bn per year by 2013 to 2014, would allow the government to "protect front line services". These savings would be driven by a squeeze on back office and IT procurement costs.

IT will also play a central role in delivering Darling's stated aim of ensuring that Britain leads the world in green technology.

The Chancellor pledged a range of budget measures to boost environmentally-focussed investment and spending, particularly low carbon technologies, advanced manufacturing systems and communications.

Darling promised extra support for the UK's broadband network, to ensure that no one was left out of the new online revolution.

Small IT start ups should also benefit from the tax breaks the Chancellor announced for small businesses -- including deferred taxes and the ability for loss making companies to reclaim tax paid over the last three years.

The drive for government efficiency savings could prove difficult. Darling embraced the recommendations of Martin Read, the former CIO of Logica, who led the IT section of the government's Operational Efficiency Programme.

Read called for better governance of IT change programmes to achieve the £4 billion of savings a year on back-office operations and called for changes to outsourcing deals to deliver a further £3.2 bn cuts.