31 July 2007 | Paul Snell
The government could save £70 million each year if it disposed of its IT more effectively.
A report published today by the National Audit Office highlights the "lack of coordination" between procurement and disposal functions. The public sector spends £2.7 billion a year on IT and this figure is expected to reach £4.1 billion by 2010-11.
The study found public sector organisations are failing to take advantage of discounts on new equipment offered by suppliers in exchange for old models - many departments are paying extra for their IT equipment to be taken away.
The age at which IT is disposed of was found to be critical. To dispose of computers that are more than four years old cost departments £4 on average. But IT products that are only three years old can generate average revenues of £3 when sold. Sales of old IT equipment could save £70 million a year.
It also found that disposing of equipment earlier would mean spending £1.8 billion more on IT each year. But savings on maintenance and operating costs would reach £2.2 billion.
It added the public sector needed to collaborate to dispose of its equipment to achieve better deals: "By aggregating demand public bodies should achieve some further savings by getting better deals on disposal commission charged or improved discounts on the procurement of new equipment, and overhead reductions by realising scale economies in the procuring and management of disposal services."