Contractors in the dark over IT cutbacks

Major contractors are still in the dark over the future of a number of public sector IT projects in the run-up to the new coalition government's spending review.

The coalition's joint policy document, released last Thursday, revealed that a number of high-profile New Labour IT initiatives were heading for the chop – and fears for future programmes have been further fuelled by today's revelation on THINQ of a government ban on new IT spending plans.

One of the first major IT casualties of chancellor George Osborne's cutbacks is the National Identity Card scheme – but questions remain about compensation for several thousand foreign residents and British nationals from the north-west who had already paid £30 for a card.

IT giant IBM was last year awarded a seven-year contract worth £265 million to provide biometric technology for the ID card scheme. The company couldn't comment on the current status of its contract, which is technically still in place until the scheme is officially repealed by legislation. Nor would it be drawn on details of payments the government is expected to make to sever its contract. However, a home office source told THINQ it was "inadvisable" for anyone to think of applying for a card for the moment, and said that a "major announcement" would be made this week.

Another potential casualty of government cuts is the NHS National Programme for IT (NPfIT), currently the largest non-military IT project in the world. So far, the scheme has cost taxpayers some £13 billion.

Despite Tory pledges to axe the project, as well as criticism over delays, last week's policy document made no mention of NPfIT.

BT is a major player in the project, with three contracts worth a total of £2.15 billion to provide super-fast broadband infrastructure and manage the national patient records database. The company was tight-lipped about the prospects for NPfIT, declining comment on THINQ's questions concerning a freeze on high-spending IT projects, saying: "It is too soon to tell."

Dell, another key supplier for the NPfIT, hit out on Friday at rumours that the NPfIT scheme was to be canned, as healthcare chief warned the government: "The baby must not be thrown out with the bathwater."