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BT dodges UK.gov axe

Firm keen to reassure investors on bottom line

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BT's finances will not be affected by government efforts to renegotiate massive IT contracts, it told investors today.

The Cabinet Office has been seeking savings from all major contractors. BT said its discussions with Minister Francis Maude agreed new efficiencies but will not damage its bottom line.

Jeff Kelly, who as Global Services CEO has overseen heavy cost-cutting in the last year, said: "Having found efficiencies in our own business, we have considerable experience which can help the Government meet its efficiency objectives.

"With today's agreement, we will continue to be one of its largest suppliers of networked IT services."

It follows suggestions at BT's last results that government cuts could have a significant impact. Global Services' rival Cable and Wireless, which runs the government's GSi intranet, issued a more explicit warning. ®

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