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The massive increase in government IT spending under New Labour has had no impact on the productivity of the public sector, a new analysis reveals.

Work by Jerry Fishenden, who was until recently Microsoft's national technology officer for the UK and is now a visiting senior fellow at the London School of Economics, shows that for all the billions thrown into IT, the UK economy has not benefited at all.

Although the government does not publish regular figures on its total IT spend - and admits those it does publish underestimate the total - Fishenden has built up a picture of rocketing expenditure for less than zero return. The resulting graph is damning:

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The green total IT spend line is a linear extrapolation from figures released by the government for 1998/9 to a recent estimate by analysts at Kable that the 2007/8 total will be about £17bn. The blue line meanwhile maps the percentage growth in overall public spending, which is published annually in the budget.

The public sector productivity data - plotted in red - is drawn from the Office of National Statistics. As a measure of efficiency, it is the government's "experimental" yardstick of value for money from the public services.

So, as the graph shows, despite the billions spent on computerising government in the last ten years - with efficiency sold as the main benefit - its productivity has been falling.

Fishenden said: "It's hard to start fixing problems if you don’t have the detailed evidence to analyse.

"One major flaw seems to have been the use of IT merely to automate existing processes, with rarely any savings or improvements in the services delivered. Instead, IT merely becomes another operating expense sitting on top of everything that was already there before."

While at Microsoft, Fishenden was a frequent critic of the National Identity Register and ID Card scheme. He believes its centralised structure is typically at the root of the failures that have meant the taxpayer has seen no return on the huge investment in IT over the last decade.

"I think the biggest change we need, which is cultural as much as IT-related, is to genuinely re-think public service design built around the needs of the citizen and the role that technology plays in enabling that re-design and the consequent operation of the services," he said.

"And I don't mean the sham of a 'citizen centric' soundbite which actually entails the producer second-guessing what a citizen might want. The public sector needs an information architecture where appropriate information is centralised but fulfilment is localised." ®

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