The UK’s Department of Work and Pensions expects to spend £65m on hosting in its next financial year, down from the £160.9m per year it was spending just before Covid hit.
The figure was revealed by the department’s head of hybrid cloud services/head of engineering, Paul Booth at a Nutanix event in London this week.
It represents a rare win for the DWP which is regularly excoriated by users and politicians over its creaking systems and sputtering transformation efforts.
Booth told the audience at the event that it had been on a seven year journey to take control of its IT estate, which has included using Nutanix for its hybrid cloud environment.
“First stage was bringing everything back in house. The second was taking standards and applying them over the whole estate and making sure things were more automated and getting that consistency. And then the third one is … We've applied abstraction layers over the top of that.”
He continued, “And what that's meant for us in terms of managing at scale is in 2019 …our hosting budget was about £169m pounds a year. Next year it’s £65m.”
Taking inflation into account, he said this represented a real terms saving of £150m a year of taxpayers money. To put that into context, the department’s digital budget is around £1bn, while its total budget is just shy of £280bn per year, reflecting its spend on pensions and benefits.
Booth said “managing at scale, getting consistencies of scale is massively important.”
The DWP’s estate is challenged to say the least. “We have a lot of problems to solve, a lot of problems. We've got code on the estate that dates back to 1970, we've got code on the estate was written last week," he explained. "So we've got a real mix of technologies, infrastructure and processes and tools. Within that bundle of wool are all these complex problems that we need to solve.”
He said that with Nutanix and some other suppliers, it was possible to have a “proper conversation” about problems. “How can we become more efficient? How can we drive price performance?” He also flagged up a “fantastic relationship” with AWS and Microsoft.
But with some of its suppliers, he admitted, “We don't have that relationship, and we don't have that conversation. It's very much a ‘We've got this thing. Yeah, it's great.’ You buy it, and it doesn't solve a problem for us.” Just who those other suppliers are was left unsaid.
See also: DWP abandons 5.3m callers: Seeks digital, data headway by 2030
The department last year was part of the £700m Synergy deal between four government departments and IBM and Oracle, for a single SaaS system for finance and HR. The deal locks DWP to Oracle for ten years – and to IBM for five.
That vintage code Booth referred to could explain why the department may never fully escape the embrace of Big Blue or Big Red.
At the same time, some of its more contemporary tech efforts have thrown up problems. A recent report by the Committee of Public Accounts raised concerns over its machine learning efforts and data analytics practices. Not least that these were leading to legitimate benefits claims being delayed or reduced.
The report raised the risk of “machine learning taking on human biases when it is trained on historical data and the potential for wide–scale detrimental impacts on claimants if there is a system–error.”
