BT in efficiency deal with government

15th Oct 2010 12:54

BT jumped to the top of the FTSE 100 after the telecoms giant announced it will continue to be one of the government's main suppliers of network IT services following talks with the Cabinet Office minister Francis Maude.It signed a memorandum of understanding with the government after discussions on efficiencies that will help the government cut costs. All of its contracts with central government remain in place, it says.The government will next week unveil its Comprehensive Spending Review, with swingeing cuts expected as the coalition seeks to deal with Britain's huge deficit.BT said it will help the government make changes that 'will enable wider economies of scale while yielding genuine benefits to government.'There is no change to BT's overall outlook as a result of this agreement, it said.BT's chief executive of global services Jeff Kelly said: 'This agreement means BT will continue to play a central role in the transformation of public services which make a real difference to the lives of people in the UK every day.'He added: 'With today's agreement, we will continue to be one of its largest suppliers of networked IT services. Many of BT's existing contracts have already delivered financial savings and operational efficiencies, demonstrating the benefits of public-private partnerships.'Earlier this week, the retail magnate Sir Philip Green, who has been hired by the coalition to seek efficiencies, said the government is wasting millions of pounds of taxpayers' money through inefficiency. Sir Philip's report, which focuses on procurement of goods and services, found that different departments were paying different prices for the same items such as stationery, due to government's failure to take advantage of its size and credit rating to push down costs.