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Laws puts brakes on gov IT spending

Promises cuts, hiring freeze

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David Laws, chief secretary to the treasury, and Francis Maude will jointly chair the "Efficiency Group" in order to help government departments renegotiate contracts with suppliers.

The group will also put a freeze on what they call "unnecessary" IT, advertising and consultancy spending over £1m. Presumably someone else will look at unnecessary spending of less than £1m.

Laws also announced an immediate freeze on civil service hiring - with the exception of frontline and "business critical" staff. This should help create savings of £120m. Squeezing more from IT is hoped to create savings of £95m.

The full speech is here.

There will be some more details of government spending, or saving, plans in the Queen's Speech later this morning.

Some of the previous government's favoured outsourcers saw sharp falls in their share prices yesterday amid market fears that they may have lost access to the golden goose. ®

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