The Bank of England needs to reduce the costs of its Central Service division, including ICT operations, to meet its target of capping overall costs at £46 million a year, according to Whitehall’s chief auditor.
The National Audit Office (NAO) has highlighted the issue in a report that also shows the Bank has been spending a third above the central government average on providing technology to support its staff.
It focuses on the Bank’s Central Services, which is responsible for its technology along with human resources, property, procurement, security and financial management.
The effort to transform the operations has begun with five initiatives underway, including programmes on cyber security and data migration.
The cyber programme is running for three years to 2020 and involves strengthening cyber security at a cost of £9 million, while the data migration involves a shift to cloud based services and is expected to cost £48.3 million with a projected reduction in operating costs of £2.3 million a year. There are also efforts to use technology to implement better systems within the £10 million One Bank Services Transformation programme, aimed at saving £3.3 million a year.
The Bank is also developing a new operating model to guide the development of its Central Services and the desired performance. But the NAO found that 44% of staff were frustrated by processes and procedures against just 30% who regarded them positively.
In addition, the cost of Central Services had climbed in real terms to hit £188 million in 2017-18.
Among the estimates in the report is that the average cost of ICT to support an end user in the Bank was £1,643 in 2016-17, compared with a central government benchmark of £1,392 and a figure for the public sector as a whole of £451. Its cost of ICT as a percentage of running costs was 8.4%, compared with figures of 3.4% and 6.3% respectively.
It managed to reduce the end user figure to £1,260 over 2017-18 through the introduction of a new IT service management tool, thereby reducing the number of service desk staff, but the NAO did not have the benchmark data from other sources to make a comparison with other parts of government.
While the Bank has committed to contain its costs to £476 million a year and improve the effectiveness of the way it works, it needs to reduce how much is spent by Central Services, the report says. It is moving in the right direction, but that to live within its self-imposed spending cap it will need the right leadership and investment.
Amyas Morse, the head of the NAO, said: “The Bank of England has rightly recognised that its Central Services need reform and has started to take action. However, the Bank should not underestimate the scale of change required. Improvements will only be possible if staff across the Bank are encouraged to embrace a more cost-conscious culture.”
Image by Captain Roger Fenton, public domain through flickr