Cabinet Office claims £75 million savings in Oracle deal

The Cabinet Office has talked up £75 million of savings in its new deal with Oracle, as it aims to sharpen up its approach to big suppliers.

In the wake of scathing assessments from select committee reports into government IT procurement, the Cabinet Office is attempting to avoid previous pitfalls to save the taxpayer some cash.

Oracle is one of the largest IT suppliers to the government, and forms part of what has been dubbed the ‘cartel’ of big business that has been slammed in the past for dominating government spending with large unwieldy contracts.

In the past such deals have been very one-sided, with the tax payer invariably losing out, though there have been signs that government departments are now putting up more of a fight of late.

Cabinet Secretary Francis Maude claimed that the days of the government “paying different prices for the same goods or services are over”. 

This will mean an end to signing “inflexible contracts that tie the taxpayer into unfavourable terms”, he said in a statement.

Maude also declared that the savings made by making some more clued-up decisions would now be implemented with the rest of its suppliers.

Central tenets of the deal include a single discount, with the government purchasing software from Oracle on  the same terms for separate departments, rather than varying from place to place.

Licence sharing will also mean that software can be reused through departments rather than having to cough up a multitude of times.

Bulk buying will also mean that overall costs will be kept down, while a reduced requirement for software upgrades has also been agreed.

Altogether this is a saving of over £75 million by 2015, at least according to the Cabinet Office, as it tries to secure better terms with its suppliers.

Last year contract negotiations clawed back £800 million in savings, with another £140 million expected this year.