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Foreign Office on target for £120m efficiency savings

Despite IT project delays

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The Foreign and Commonwealth Office (FCO) has insisted that it is on course to deliver on its £120m efficiency savings target by the end of 2007-08.

The declaration comes in spite of delays to its Future Firecrest desktop IT project, which will not be rolled out until early next year. In a review of its annual report for 2006-07, the Commons Foreign Affairs Committee congratulates the department for staying on course by introducing several new projects which have compensated for the delayed savings.

In its 2005-06 annual report, the FCO had forecast its IT efficiency savings for 2006-07 at £16.4m, but delays to the project meant that up to the third quarter of 2006-07 only £1.1m of efficiencies had been achieved.

The delays were a result of new rules imposed by the security authorities over what IT systems could be connected to the internet and the relevant security arrangements. These came just when the FCO was about to sign the contract with Hewlett Packard, forcing it to embark on a significant redesign.

Related efficiencies to the programme will now be realised outside the Spending Review 2004 period, but the FCO expects savings from other projects to "more than" compensate. The FCO has also reduced the original estimate for the altered specification from £53m to £36m, following negotiations with HP. This was also welcomed by the committee, although it expressed concern over the tightness of the programme's delivery timetable.

MPs also suggested that the FCO should share its OGC Gateway 0 review of its shared services programme. One of the main projects fo the programme is to consolidate financial and procurement processes and human resources for local staff in a small number of global process centres.

The FCO told the committee that the greatest risks governing the shared services programme included the possibility that the Treasury would refuse to fund redundancy costs; preparing posts for the shared services implementation phase; and change fatigue, leading to loss of morale and key staff leaving.

The British Council is in talks with the FCO and the Department for International Development about sharing arrangements for banking and managing foreign exchange. The council is also exploring shared services in back office accounting and transaction processing.

This article was originally published at Kablenet.

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